[Title 29 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2017 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          

          
          Title 29

Labor


________________________

Parts 0 to 99

                         Revised as of July 1, 2017

          Containing a codification of documents of general 
          applicability and future effect

          As of July 1, 2017
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 29:
          SUBTITLE A--Office of the Secretary of Labor               3
  Finding Aids:
      Table of CFR Titles and Chapters........................     773
      Alphabetical List of Agencies Appearing in the CFR......     793
      List of CFR Sections Affected...........................     803

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                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 29 CFR 0.735-1 
                       refers to title 29, part 
                       0, section 735-1.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, July 1, 2017), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
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instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

PAST PROVISIONS OF THE CODE

    Provisions of the Code that are no longer in force and effect as of 
the revision date stated on the cover of each volume are not carried. 
Code users may find the text of provisions in effect on any given date 
in the past by using the appropriate List of CFR Sections Affected 
(LSA). For the convenience of the reader, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume. For changes to 
the Code prior to the LSA listings at the end of the volume, consult 
previous annual editions of the LSA. For changes to the Code prior to 
2001, consult the List of CFR Sections Affected compilations, published 
for 1949-1963, 1964-1972, 1973-1985, and 1986-2000.

``[RESERVED]'' TERMINOLOGY

    The term ``[Reserved]'' is used as a place holder within the Code of 
Federal Regulations. An agency may add regulatory information at a 
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used 
editorially to indicate that a portion of the CFR was left vacant and 
not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
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if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    What if the material incorporated by reference cannot be found? If 
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or call 202-741-6010.

CFR INDEXES AND TABULAR GUIDES

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separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Authorities 
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alphabetical list of agencies publishing in the CFR are also included in 
this volume.

[[Page vii]]

    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

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in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
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    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
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    The e-CFR is a regularly updated, unofficial editorial compilation 
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    Oliver A. Potts,
    Director,
    Office of the Federal Register.
    July 1, 2017.

                                
                                      
                            

  

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                               THIS TITLE

    Title 29--Labor is composed of nine volumes. The parts in these 
volumes are arranged in the following order: Parts 0-99, parts 100-499, 
parts 500-899, parts 900-1899, part 1900-Sec. 1910.999, part 1910.1000-
end of part 1910, parts 1911-1925, part 1926, and part 1927 to end. The 
contents of these volumes represent all current regulations codified 
under this title as of July 1, 2017.

    The OMB control numbers for title 29 CFR part 1910 appear in 
Sec. 1910.8. For the convenience of the user, Sec. 1910.8 appears in the 
Finding Aids section of the volume containing Sec. 1910.1000 to the end.

    For this volume, Susannah C. Hurley was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of John 
Hyrum Martinez, assisted by Stephen J. Frattini.

[[Page 1]]



                             TITLE 29--LABOR




                   (This book contains parts 0 to 99)

  --------------------------------------------------------------------
                                                                    Part

SUBTITLE A--Office of the Secretary of Labor................           0

[[Page 3]]

              Subtitle A--Office of the Secretary of Labor

  --------------------------------------------------------------------

Part                                                                Page
0               Ethics and conduct of Department of Labor 
                    employees...............................           7
1               Procedures for predetermination of wage 
                    rates...................................           9
2               General regulations.........................          17
3               Contractors and subcontractors on public 
                    building or public work financed in 
                    whole or in part by loans or grants from 
                    the United States.......................          29
4               Labor standards for Federal service 
                    contracts...............................          33
5               Labor standards provisions applicable to 
                    contracts covering federally financed 
                    and assisted construction (also labor 
                    standards provisions applicable to 
                    nonconstruction contracts subject to the 
                    Contract Work Hours and Safety Standards 
                    Act)....................................         113
6               Rules of practice for administrative 
                    proceedings enforcing labor standards in 
                    Federal and federally assisted 
                    construction contracts and Federal 
                    service contracts.......................         140
7               Practice before the Administrative Review 
                    Board with regard to Federal and 
                    federally assisted construction 
                    contracts...............................         151
8               Practice before the Administrative Review 
                    Board with regard to Federal service 
                    contracts...............................         155
9               Nondisplacement of qualified workers under 
                    service contracts.......................         159
10              Establishing a minimum wage for contractors.         177
11              Department of Labor National Environmental 
                    Policy Act (NEPA) compliance procedures.         196
12              Uniform relocation assistance and real 
                    property acquisition for Federal and 
                    federally assisted programs.............         203
13              Establishing paid sick leave for Federal 
                    contractors.............................         203

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14              Security regulations........................         230
15              Administrative claims under the Federal Tort 
                    Claims Act and related claims statutes..         234
16              Equal Access to Justice Act.................         247
17              Intergovernmental review of Department of 
                    Labor programs and activities...........         253
18              Rules of practice and procedure for 
                    administrative hearings before the 
                    Office of Administrative Law Judges.....         257
19              Right to Financial Privacy Act..............         314
20              Federal claims collection...................         316
21              Protection of human subjects (Eff. 1-19-18).         344
22              Program Fraud Civil Remedies Act of 1986....         361
24              Procedures for the handling of retaliation 
                    complaints under the employee protection 
                    provisions of six environmental statutes 
                    and section 211 of the Energy 
                    Reorganization Act of 1974, as amended..         377
25              Rules for the nomination of arbitrators 
                    under section 11 of Executive Order 
                    10988...................................         388
29              Labor standards for the registration of 
                    apprenticeship programs.................         391
30              Equal employment opportunity in 
                    apprenticeship..........................         407
31              Nondiscrimination in federally assisted 
                    programs of the Department of Labor--
                    effectuation of Title VI of the Civil 
                    Rights Act of 1964......................         426
32              Nondiscrimination on the basis of handicap 
                    in programs or activities receiving 
                    Federal financial assistance............         436
33              Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Department 
                    of Labor................................         453
34              Implementation of the nondiscrimination and 
                    equal opportunity requirements of the 
                    Job Training Partnership Act of 1982, as 
                    amended (JTPA)..........................         460
35              Nondiscrimination on the basis of age in 
                    programs or activities receiving Federal 
                    financial assistance from the Department 
                    of Labor................................         486
36              Nondiscrimination on the basis of sex in 
                    education programs or activities 
                    receiving Federal financial assistance..         501
37              Implementation of the nondiscrimination and 
                    equal opportunity provisions of the 
                    Workforce Investment Act of 1998 (WIA)..         518

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38              Implementation of the Nondiscrimination and 
                    Equal Opportunity Provisions of the 
                    Workforce Innovation and Opportunity Act         558
42              Coordinated enforcement.....................         615
44              Process for electing State agency employment 
                    statistics representatives for 
                    consultations with Department of Labor..         621
70              Production or disclosure of information or 
                    materials...............................         622
71              Protection of individual privacy and access 
                    to records under the Privacy Act of 1974         639
75              Department of Labor review and certification 
                    procedures for rural industrialization 
                    loan and grant programs under the 
                    Consolidated Farm and Rural Development 
                    Act of 1972.............................         660
90              Certification of eligibility to apply for 
                    worker adjustment assistance............         663
93              New restrictions on lobbying................         672
94              Governmentwide requirements for drug-free 
                    workplace (financial assistance)........         684
95              Grants and agreements with institutions of 
                    higher education, hospitals, and other 
                    non-profit organizations, and with 
                    commercial organizations, foreign 
                    governments, organizations under the 
                    jurisdiction of foreign governments, and 
                    international organizations.............         689
96              Audit requirements for grants, contracts, 
                    and other agreements....................         715
97              Uniform administrative requirements for 
                    grants and cooperative agreements to 
                    State and local governments.............         720
99              Audits of States, local governments, and 
                    non-profit organizations................         747

[[Page 7]]



PART 0_ETHICS AND CONDUCT OF DEPARTMENT OF LABOR EMPLOYEES--Table of Contents



Subpart A_Standards of Conduct for Current Department of Labor Employees

Sec.
0.735-1  Cross-references to employee ethical conduct standards, 
          financial disclosure regulations and other ethics regulations.

             Subpart B_Post Employment Conflict of Interest

0.737-1  Applicability.
0.737-2  Appointment of alternate officials.
0.737-3  Initiation of administrative disciplinary hearing.
0.737-4  Request for a hearing.
0.737-5  Appointment of Examiner.
0.737-6  Time, date and place of hearing.
0.737-7  Hearing rights.
0.737-8  Hearing decision and exceptions.
0.737-9  Decision on exceptions.
0.737-10  Administrative sanctions.
0.737-11  Judicial review.

    Authority: 5 U.S.C. 301; 18 U.S.C. 207 (1988); E.O. 12674, 54 FR 
15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 
42547, 3 CFR, 1990 Comp., p. 306; 5 CFR part 2634, part 2635, part 2640.

    Source: 33 FR 10432, July 20, 1968, unless otherwise noted.



Subpart A_Standards of Conduct for Current Department of Labor Employees



Sec. 0.735-1  Cross-references to employee ethical conduct standards,
financial disclosure regulations and other ethics regulations.

    Employees of the Department of Labor (Department) are subject to the 
executive branch-wide standards of ethical conduct at 5 CFR part 2635, 
the Department's regulations at 5 CFR part 5201 which supplement the 
executive branch-wide standards, the executive branch financial 
disclosure regulations at 5 CFR part 2634, the conflicts of interest 
regulations at 5 CFR part 2640, and the post employment regulations at 5 
CFR part 2641.

[64 FR 73853, Dec. 30, 1999]



             Subpart B_Post Employment Conflict of Interest

    Source: 48 FR 11944, Mar. 22, 1983, unless otherwise noted. 
Redesignated at 61 FR 57287, Nov. 6, 1996.



Sec. 0.737-1  Applicability.

    This subpart is applicable to any former employee of the Department 
of Labor leaving Government service on or after July 1, 1979 and prior 
to January 1, 1991.

[64 FR 73853, Dec. 30, 1999]



Sec. 0.737-2  Appointment of alternate officials.

    Notwithstanding any other provision of this subpart, the Secretary 
of Labor is authorized to perform any of the functions otherwise 
assigned in this subpart to the Under Secretary in any proceeding. The 
Secretary is also authorized to appoint as an alternate official any 
other officer or employee of the Department of Labor to perform 
functions otherwise assigned in this subpart to the Under Secretary or 
the Solicitor of Labor in any proceeding; except that:
    (a) The functions otherwise assigned in this subpart to the Under 
Secretary and the Solicitor shall not both be performed by the same 
alternate official in the same proceeding, and
    (b) The same individual shall not be appointed as both an Examiner 
under Sec. 0.737-5 and an alternate official under this section in the 
same proceeding.



Sec. 0.737-3  Initiation of administrative disciplinary hearing.

    (a) Any person may, in writing, report an apparent violation of 18 
U.S.C. 207(a), (b) or (c) or the regulations of the Office of Personnel 
Management at 5 CFR part 737 by a former employee described in 
Sec. 0.737-1 to the Solicitor of Labor.
    (b) On receipt of information regarding a possible violation of 18 
U.S.C. 207, and after determining that such information appears to be 
substantiated, the Solicitor shall expeditiously provide such 
information, along with any comments or agency regulations, to the 
Office of the Inspector General, the Director of the Office of 
Government

[[Page 8]]

Ethics and to the Criminal Division, Department of Justice.
    (c) Whenever the Solicitor has determined after appropriate review 
that there is reasonable cause to believe that a former employee 
described in Sec. 0.737-1 has violated 18 U.S.C. 207(a), (b) or (c) or 
the regulations of the Office of Personnel Management at 5 CFR part 737, 
the Solicitor may initiate an administrative disciplinary proceeding by 
providing the former employee with a notice of alleged violation.
    (d) The notice of alleged violation shall include:
    (1) A statement of allegations (and the basis thereof) sufficiently 
detailed to enable the former employee to prepare an adequate defense;
    (2) Notification of the right to a hearing; and
    (3) An explanation of the method by which a hearing may be 
requested.



Sec. 0.737-4  Request for a hearing.

    (a) Any former employee who is the subject of a notice of alleged 
violation issued by the Solicitor under Sec. 0.737-3 may within 15 days 
from the date of such notice request a hearing by writing to: The Office 
of the Under Secretary, U.S. Department of Labor, 200 Constitution 
Avenue, Washington, DC 20210.
    (b) If the former employee fails to request a hearing in accordance 
with paragraph (a), the Under Secretary may then render a final 
administrative decision in the matter and, if appropriate, impose the 
sanctions specified in Sec. 0.737-10.



Sec. 0.737-5  Appointment of Examiner.

    Whenever a notice of alleged violation has been issued and a hearing 
requested, the Under Secretary shall provide for the selection of a 
Department of Labor Administrative Law Judge, appointed in accordance 
with 5 U.S.C. 3105, to act as the Examiner with respect to the matter.



Sec. 0.737-6  Time, date and place of hearing.

    (a) Any hearing shall be conducted at a reasonable time, date and 
place as determined by the Examiner.
    (b) In setting a hearing date the Examiner shall give due regard to 
the former employee's need for:
    (1) Adequate time to prepare a defense properly, and
    (2) An expeditious resolution of allegations that may be damaging to 
his or her reputation.



Sec. 0.737-7  Hearing rights.

    (a) The following rights shall be afforded at a hearing conducted 
before the Examiner:
    (1) To represent oneself or to be represented by counsel,
    (2) To introduce and examine witnesses and to submit physical 
evidence,
    (3) To confront and cross-examine adverse witnesses,
    (4) To present oral argument; and
    (5) To obtain a transcript or recording of proceedings, on request.
    (b) In a hearing under this subpart, the Federal Rules of Civil 
Procedure and Evidence do not apply. However, the Examiner may make 
orders and determinations regarding discovery, admissability of 
evidence, conduct of examination and cross-examination, and similar 
matters as the Examiner deems necessary or appropriate to ensure 
orderliness of the proceedings and fundamental fairness to the parties.
    (c) In any proceeding under this subpart, the Department must 
establish any violation by a preponderance of the evidence.



Sec. 0.737-8  Hearing decision and exceptions.

    The Examiner shall make a determination exclusively on matters of 
record in the proceeding, and shall set forth in the hearing decision 
all findings of fact and conclusions of law relevant to the matters at 
issue. The hearing decision of the Examiner shall be considered final 
agency administrative action unless either party files exceptions in 
writing to the Under Secretary, U.S. Department of Labor, 200 
Constitution Avenue, Washington, DC 20210 within 30 days from the date 
of such hearing decision.



Sec. 0.737-9  Decision on exceptions.

    (a) Upon receipt of exceptions, the Under Secretary may afford both 
parties an opportunity to submit briefs or

[[Page 9]]

other appropriate statements in support of their respective positions.
    (b) The Under Secretary shall issue a decision based solely on the 
record of the proceedings or those portions thereof cited by the parties 
to limit the issues.
    (c) If the Under Secretary modifies or reverses the initial hearing 
decision of the Examiner, he or she shall specify such findings of fact 
and conclusions of law as are different from those of the Examiner.



Sec. 0.737-10  Administrative sanctions.

    The Examiner (or the Under Secretary in any matter in which 
exceptions are filed or which is decided in accordance with Sec. 0.737-
4(b)) may take appropriate action in the case of any individual found in 
violation of 18 U.S.C. 207(a), (b) or (c) or of the regulations at 5 CFR 
part 737 upon final administrative decisions by:
    (a) Prohibiting the individual from making, on behalf of any other 
person (except the United States), any formal or informal appearance 
before, or, with the intent to influence, any oral or written 
communication to the Department of Labor on any matter of business for a 
period not to exceed five years, which may be accomplished by directing 
agency employees to refuse to participate in any such appearance or to 
accept any such communications; or
    (b) Taking other appropriate disciplinary action.



Sec. 0.737-11  Judicial review.

    Any person found to have participated in a violation of 18 U.S.C. 
207(a), (b), or (c) or the regulations at 5 CFR part 737 may seek 
judicial review of the administrative determination in an appropriate 
United States district court.



PART 1_PROCEDURES FOR PREDETERMINATION OF WAGE RATES--Table of Contents



Sec.
1.1  Purpose and scope.
1.2  Definitions.
1.3  Obtaining and compiling wage rate information.
1.4  Outline of agency construction programs.
1.5  Procedure for requesting wage determinations.
1.6  Use and effectiveness of wage determinations.
1.7  Scope of consideration.
1.8  Reconsideration by the Administrator.
1.9  Review by Administrative Review Board.

Appendix A to Part 1
Appendix B to Part 1

    Authority: 5 U.S.C. 301; R.S. 161, 64 Stat. 1267; Reorganization 
Plan No. 14 of 1950, 5 U.S.C. appendix; 40 U.S.C. 3141 et seq.; 40 
U.S.C. 3145; 40 U.S.C. 3148; and the laws listed in appendix A of this 
part.

    Source: 48 FR 19533, Apr. 29, 1983, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 1 appear at 61 FR 
19984, May 3, 1996.



Sec. 1.1  Purpose and scope.

    (a) The procedural rules in this part apply under the Davis-Bacon 
Act (946 Stat. 1494, as amended; 40 U.S.C. 276a--276a-7) and other 
statutes listed in appendix A to this part which provide for the payment 
of minimum wages, including fringe benefits, to laborers and mechanics 
engaged in construction activity under contracts entered into or 
financed by or with the assistance of agencies of the United States or 
the District of Columbia, based on determinations by the Secretary of 
Labor of the wage rates and fringe benefits prevailing for the 
corresponding classes of laborers and mechanics employed on projects 
similar to the contract work in the local areas where such work is to be 
performed. Functions of the Secretary of Labor under these statutes and 
under Reorganization Plan No. 14 of 1950 (64 Stat. 1267, 5 U.S.C. 
appendix), except those assigned to the Administrative Review Board (see 
29 CFR part 7), have been delegated to the Deputy Under Secretary of 
Labor for Employment Standards who in turn has delegated the functions 
to the Administrator of the Wage and Hour Division, and authorized 
representatives.
    (b) The regulations in this part set forth the procedures for making 
and applying such determinations of prevailing wage rates and fringe 
benefits pursuant to the Davis-Bacon Act, each of the other statutes 
listed in appendix A, and any other Federal statute providing for 
determinations of such

[[Page 10]]

wages by the Secretary of Labor in accordance with the provisions of the 
Davis-Bacon Act.
    (c) Procedures set forth in this part are applicable, unless 
otherwise indicated, both to general wage determinations for contracts 
in specified localities, and to project wage determinations for use on 
contract work to be performed on a specific project.

[48 FR 19533, Apr. 29, 1983, as amended at 50 FR 49823, Dec. 4, 1985]



Sec. 1.2  Definitions. \1\
---------------------------------------------------------------------------

    \1\ These definitions are not intended to restrict the meaning of 
the terms as used in the applicable statutes.
---------------------------------------------------------------------------

    (a)(1) The prevailing wage shall be the wage paid to the majority 
(more than 50 percent) of the laborers or mechanics in the 
classification on similar projects in the area during the period in 
question. If the same wage is not paid to a majority of those employed 
in the classification, the prevailing wage shall be the average of the 
wages paid, weighted by the total employed in the classification.
    (2) In determining the prevailing wages at the time of issuance of a 
wage determination, the Administrator will be guided by paragraph (a)(1) 
of this section and will consider the types of information listed in 
Sec. 1.3 of this part.
    (b) The term area in determining wage rates under the Davis-Bacon 
Act and the prevailing wage provisions of the other statutes listed in 
appendix A shall mean the city, town, village, county or other civil 
subdivision of the State in which the work is to be performed.
    (c) The term Administrator shall mean the Administrator of the Wage 
and Hour Division, U.S. Department of Labor, or authorized 
representative.
    (d) The term agency shall mean the Federal agency, State highway 
department under 23 U.S.C. 113, or recipient State or local government 
under title 1 of the State and Local Fiscal Assistance Act of 1972.
    (e) The term Wage Determinations OnLine (WDOL) shall mean the 
Government Internet Web site for both Davis-Bacon Act and Service 
Contract Act wage determinations available at http://www.wdol.gov. In 
addition, WDOL provides compliance assistance information. The term will 
also apply to any other Internet Web site or electronic means that the 
Department of Labor may approve for these purposes.

[48 FR 19533, Apr. 29, 1983, as amended at 48 FR 50313, Nov. 1, 1983; 70 
FR 50894, Aug. 26, 2005; 82 FR 2223, Jan. 9, 2017]



Sec. 1.3  Obtaining and compiling wage rate information.

    For the purpose of making wage determinations, the Administrator 
will conduct a continuing program for the obtaining and compiling of 
wage rate information.
    (a) The Administrator will encourage the voluntary submission of 
wage rate data by contractors, contractors' associations, labor 
organizations, public officials and other interested parties, reflecting 
wage rates paid to laborers and mechanics on various types of 
construction in the area. The Administrator may also obtain data from 
agencies on wage rates paid on construction projects under their 
jurisdiction. The information submitted should reflect not only the wage 
rates paid a particular classification in an area, but also the type or 
types of construction on which such rate or rates are paid, and whether 
or not such rates were paid on Federal or federally assisted projects 
subject to Davis-Bacon prevailing wage requirements.
    (b) The following types of information may be considered in making 
wage rate determinations:
    (1) Statements showing wage rates paid on projects. Such statements 
should include the names and addresses of contractors, including 
subcontractors, the locations, approximate costs, dates of construction 
and types of projects, whether or not the projects are Federal or 
federally assisted projects subject to Davis-Bacon prevailing wage 
requirements, the number of workers employed in each classification on 
each project, and the respective wage rates paid such workers.
    (2) Signed collective bargaining agreements. The Administrator may 
request the parties to an agreement to submit statements certifying to 
its scope and application.

[[Page 11]]

    (3) Wage rates determined for public construction by State and local 
officials pursuant to State and local prevailing wage legislation.
    (4) In making wage rate determinations pursuant to 23 U.S.C. 113, 
the highway department of the State in which a project in the Federal-
Aid highway system is to be performed shall be consulted. Before making 
a determination of wage rates for such a project the Administrator shall 
give due regard to the information thus obtained.
    (5) Wage rate data submitted to the Department of Labor by 
contracting agencies pursuant to 29 CFR 5.5(a)(1)(ii).
    (6) Any other information pertinent to the determination of 
prevailing wage rates.
    (c) The Administrator may initially obtain or supplement such 
information obtained on a voluntary basis by such means, including the 
holding of hearings, and from any sources determined to be necessary. 
All information of the types described in Sec. 1.3(b) of this part, 
pertinent to the determination of the wages prevailing at the time of 
issuance of the wage determination, will be evaluated in the light of 
Sec. 1.2(a) of this part.
    (d) In compiling wage rate data for building and residential wage 
determinations, the Administrator will not use data from Federal or 
federally assisted projects subject to Davis-Bacon prevailing wage 
requirements unless it is determined that there is insufficient wage 
data to determine the prevailing wages in the absence of such data. Data 
from Federal or federally assisted projects will be used in compiling 
wage rate data for heavy and highway wage determinations.

[48 FR 19533, Apr. 29, 1983, as amended at 50 FR 4506, Jan. 31, 1985]



Sec. 1.4  Outline of agency construction programs.

    To the extent practicable, at the beginning of each fiscal year each 
agency using wage determinations under any of the various statutes 
listed in appendix A will furnish the Administrator with a general 
outline of its proposed construction programs for the coming year 
indicating the estimated number of projects for which wage 
determinations will be required, the anticipated types of construction, 
and the locations of construction. During the fiscal year, each agency 
will notify the Administrator of any significant changes in its proposed 
construction programs, as outlined at the beginning of the fiscal year. 
This report has been cleared in accordance with FPMR 101-11.11 and 
assigned interagency report control number 1671-DOL-AN.



Sec. 1.5  Procedure for requesting wage determinations.

    (a) The Department of Labor publishes general wage determinations 
under the Davis-Bacon Act on the WDOL Internet Web site. If there is a 
general wage determination applicable to the project, the agency may use 
it without notifying the Department of Labor, Provided, That questions 
concerning its use shall be referred to the Department of Labor in 
accordance with Sec. 1.6(b).
    (b)(1) If a general wage determination is not available, the Federal 
agency shall request a wage determination under the Davis-Bacon Act or 
any of its related prevailing wage statutes by submitting Form SF-308 to 
the Department of Labor at this address: U.S. Department of Labor, Wage 
and Hour Division, Branch of Government Construction Contract Wage 
Determination, Washington, DC 20210. In preparing Form SF-308, the 
agency shall check only those classifications that will be needed in the 
performance of the work. Inserting a note such as ``entire schedule'' or 
``all applicable classifications'' is not sufficient. Additional 
classifications needed that are not on the form may be typed in the 
blank spaces or on a separate list and attached to the form.
    (2) In completing SF-308, the agency shall furnish:
    (i) A sufficiently detailed description of the work to indicate the 
type of construction involved. Additional description or separate 
attachment, if necessary for identification of type of project, shall be 
furnished.
    (ii) The county (or other civil subdivision) and State in which the 
proposed project is located.

[[Page 12]]

    (3) Such request for a wage determination shall be accompanied by 
any pertinent wage payment information that may be available. When the 
requesting agency is a State highway department under the Federal-Aid 
Highway Acts as codified in 23 U.S.C. 113, such agency shall also 
include its recommendations as to the wages which are prevailing for 
each classification of laborers and mechanics on similar construction in 
the area.
    (c) The time required for processing requests for wage 
determinations varies according to the facts and circumstances in each 
case. An agency should anticipate that such processing in the Department 
of Labor will take at least 30 days.

[48 FR 19533, Apr. 29, 1983, as amended at 48 FR 50313, Nov. 1, 1983; 50 
FR 49823, Dec. 4, 1985; 70 FR 50894, Aug. 26, 2005; 82 FR 2223, Jan. 9, 
2017]



Sec. 1.6  Use and effectiveness of wage determinations.

    (a)(1) Project wage determinations initially issued shall be 
effective for 180 calendar days from the date of such determinations. If 
such a wage determination is not used in the period of its effectiveness 
it is void. Accordingly, if it appears that a wage determination may 
expire between bid opening and contract award (or between initial 
endorsement under the National Housing Act or the execution of an 
agreement to enter into a housing assistance payments contract under 
section 8 of the U.S. Housing Act of 1937, and the start of 
construction) the agency shall request a new wage determination 
sufficiently in advance of the bid opening to assure receipt prior 
thereto. However, when due to unavoidable circumstances a determination 
expires before award but after bid opening (or before the start of 
construction, but after initial endorsement under the National Housing 
Act, or before the start of construction but after the execution of an 
agreement to enter into a housing assistance payments contract under 
section 8 of the U.S. Housing Act of 1937), the head of the agency or 
his or her designee may request the Administrator to extend the 
expiration date of the wage determination in the bid specifications 
instead of issuing a new wage determination. Such request shall be 
supported by a written finding, which shall include a brief statement of 
the factual support, that the extension of the expiration date of the 
determination is necessary and proper in the public interest to prevent 
injustice or undue hardship or to avoid serious impairment in the 
conduct of Government business. The Administrator will either grant or 
deny the request for an extension after consideration of all of the 
circumstances, including an examination to determine if the previously 
issued rates remain prevailing. If the request for extension is denied, 
the Administrator will proceed to issue a new wage determination for the 
project.
    (2) General wage determinations issued pursuant to Sec. 1.5(a), 
notice of which is published on WDOL, shall contain no expiration date.
    (b) Contracting agencies are responsible for insuring that only the 
appropriate wage determination(s) are incorporated in bid solicitations 
and contract specifications and for designating specifically the work to 
which such wage determinations will apply. Any question regarding 
application of wage rate schedules shall be referred to the 
Administrator, who shall give foremost consideration to area practice in 
resolving the question.
    (c)(1) Project and general wage determinations may be modified from 
time to time to keep them current. A modification may specify only the 
items being changed, or may be in the form of a supersedeas wage 
determination, which replaces the entire wage determination. Such 
actions are distinguished from a determination by the Administrator 
under paragraphs (d), (e) and (f) of this section that an erroneous wage 
determination has been issued or that the wrong wage determination or 
wage rate schedule has been utilized by the agency.
    (2)(i) All actions modifying a project wage determination received 
by the agency before contract award (or the start of construction where 
there is no contract award) shall be effective except as follows:
    (A) In the case of contracts entered into pursuant to competitive 
bidding procedures, modifications received by the agency less than 10 
days before the

[[Page 13]]

opening of bids shall be effective unless the agency finds that there is 
not a reasonable time still available before bid opening, to notify 
bidders of the modification and a report of the finding is inserted in 
the contract file. A copy of such report shall be made available to the 
Administrator upon request. No such report shall be required if the 
modification is received after bid opening.
    (B) In the case of projects assisted under the National Housing Act, 
modifications shall be effective if received prior to the beginning of 
construction or the date the mortgage is initially endorsed, whichever 
occurs first.
    (C) In the case of projects to receive housing assistance payments 
under section 8 of the U.S. Housing Act of 1937, modifications shall be 
effective if received prior to the beginning of construction or the date 
the agreement to enter into a housing assistance payments contract is 
executed, whichever occurs first.
    (ii) Modifications to project wage determinations and supersedeas 
wage determinations shall not be effective after contract award (or 
after the beginning of construction where there is no contract award).
    (iii) Actual written notice of a modification shall constitute 
receipt.
    (3) All actions modifying a general wage determination shall be 
effective with respect to any project to which the determination 
applies, if notice of such actions is published before contract award 
(or the start of construction where there is no contract award), except 
as follows:
    (i) In the case of contracts entered into pursuant to competitive 
bidding procedures, a modification, notice of which is published less 
than 10 days before the opening of bids, shall be effective unless the 
agency finds that there is not a reasonable time still available before 
bid opening to notify bidders of the modification and a report of the 
finding is inserted in the contract file. A copy of such report shall be 
made available to the Administrator upon request. No such report shall 
be required if notice of the modification is published after bid 
opening.
    (ii) In the case of projects assisted under the National Housing 
Act, a modification shall be effective if notice of such modification is 
published prior to the beginning of construction or the date the 
mortgage is initially endorsed, whichever occurs first.
    (iii) In the case of projects to receive housing assistance payments 
under section 8 of the U.S. Housing Act of 1937, a modification shall be 
effective if notice of such modification is published prior to the 
beginning of construction or the date the agreement to enter into a 
housing assistance payments contract is signed, whichever occurs first.
    (iv) If under paragraph (c)(3)(i) of this section the contract has 
not been awarded within 90 days after bid opening, or if under paragraph 
(c)(3)(ii) or (iii) of this section construction has not begun within 90 
days after initial endorsement or the signing of the agreement to enter 
into a housing assistance payments contract, any modification, notice of 
which is published on WDOL prior to award of the contract or the 
beginning of construction, as appropriate, shall be effective with 
respect to that contract unless the head of the agency or his or her 
designee requests and obtains an extension of the 90-day period from the 
Administrator. Such request shall be supported by a written finding, 
which shall include a brief statement of the factual support, that the 
extension is necessary and proper in the public interest to prevent 
injustice or undue hardship or to avoid serious impairment in the 
conduct of Government business. The Administrator will either grant or 
deny the request for an extension after consideration of all the 
circumstances.
    (v) A modification to a general wage determination is ``published'' 
within the meaning of this section on the date notice of a modification 
or a supersedeas wage determination is published on WDOL or on the date 
the agency receives actual written notice of the modification from the 
Department of Labor, whichever occurs first. Archived versions of Davis-
Bacon and Related Acts wage determinations that are no longer current 
may be accessed in the ``Archived DB WD'' database of WDOL for 
information purposes only. Contracting officers should not use an

[[Page 14]]

archived wage determination in a contract action without prior approval 
of the Department of Labor.
    (vi) A supersedeas wage determination or a modification to an 
applicable general wage determination, notice of which is published 
after contract award (or after the beginning of construction where there 
is no contract award) shall not be effective.
    (d) Upon his/her own initiative or at the request of an agency, the 
Administrator may correct any wage determination, without regard to 
paragraph (c) of this section, whenever the Administrator finds such a 
wage determination contains clerical errors. Such corrections shall be 
included in any bid specifications containing the wage determination, or 
in any on-going contract containing the wage determination in question, 
retroactively to the start of construction.
    (e) Written notification by the Department of Labor prior to the 
award of a contract (or the start of construction under the National 
Housing Act, under section 8 of the U.S. Housing Act of 1937, or where 
there is no contract award) that: (1) There is included in the bidding 
documents or solicitation the wrong wage determination or the wrong 
schedule or that (2) a wage determination is withdrawn by the Department 
of Labor as a result of a decision by the Administrative Review Board, 
shall be effective immediately without regard to paragraph (c) of this 
section.
    (f) The Administrator may issue a wage determination after contract 
award or after the beginning of construction if the agency has failed to 
incorporate a wage determination in a contract required to contain 
prevailing wage rates determined in accordance with the Davis-Bacon Act, 
or has used a wage determination which by its terms or the provisions of 
this part clearly does not apply to the contract. Further, the 
Administrator may issue a wage determination which shall be applicable 
to a contract after contract award or after the beginning of 
construction when it is found that the wrong wage determination has been 
incorporated in the contract because of an inaccurate description of the 
project or its location in the agency's request for the wage 
determination. Under any of the above circumstances, the agency shall 
either terminate and resolicit the contract with the valid wage 
determination, or incorporate the valid wage determination retroactive 
to the beginning of construction through supplemental agreement or 
through change order, Provided That the contractor is compensated for 
any increases in wages resulting from such change. The method of 
incorporation of the valid wage determination, and adjustment in 
contract price, where appropriate, should be in accordance with 
applicable procurement law.
    (g) If Federal funding or assistance under a statute requiring 
payment of wages determined in accordance with the Davis-Bacon Act is 
not approved prior to contract award (or the beginning of construction 
where there is no contract award), the agency shall request a wage 
determination prior to approval of such funds. Such a wage determination 
shall be issued based upon the wages and fringe benefits found to be 
prevailing on the date of award or the beginning of construction (under 
the National Housing Act, under section 8 of the U.S. Housing Act of 
1937 or where there is no contract award), as appropriate, and shall be 
incorporated in the contract specifications retroactively to that date, 
Provided, That upon the request of the head of the agency in individual 
cases the Administrator may issue such a wage determination to be 
effective on the date of approval of Federal funds or assistance 
whenever the Administrator finds that it is necessary and proper in the 
public interest to prevent injustice or undue hardship, Provided further 
That the Administrator finds no evidence of intent to apply for Federal 
funding or assistance prior to contract award or the start of 
construction, as appropriate.

[48 FR 19533, Apr. 29, 1983, as amended at 50 FR 49823, Dec. 4, 1985; 70 
FR 50894, Aug. 26, 2005]



Sec. 1.7  Scope of consideration.

    (a) In making a wage determination, the area will normally be the 
county unless sufficient current wage data (data on wages paid on 
current projects or, where necessary, projects under construction no 
more than one year

[[Page 15]]

prior to the beginning of the survey or the request for a wage 
determination, as appropriate) is unavailable to make a wage 
determination.
    (b) If there has not been sufficient similar construction within the 
area in the past year to make a wage determination, wages paid on 
similar construction in surrounding counties may be considered, Provided 
That projects in metropolitan counties may not be used as a source of 
data for a wage determination in a rural county, and projects in rural 
counties may not be used as a source of data for a wage determination 
for a metropolitan county.
    (c) If there has not been sufficient similar construction in 
surrounding counties or in the State in the past year, wages paid on 
projects completed more than one year prior to the beginning of the 
survey or the request for a wage determination, as appropriate, may be 
considered.
    (d) The use of helpers, apprentices and trainees is permitted in 
accordance with part 5 of this subtitle.

[48 FR 19533, Apr. 29, 1983, as amended at 50 FR 4507, Jan. 31, 1985; 55 
FR 50149, Dec. 4, 1990; 65 FR 69692, Nov. 20, 2000]



Sec. 1.8  Reconsideration by the Administrator.

    Any interested person may seek reconsideration of a wage 
determination issued under this part or of a decision of the 
Administrator regarding application of a wage determination. Such a 
request for reconsideration shall be in writing accompanied by a full 
statement of the interested person's views and any supporting wage data 
or other pertinent information. The Administrator will respond within 30 
days of receipt thereof, or will notify the requestor within the 30-day 
period that additional time is necessary.



Sec. 1.9  Review by Administrative Review Board.

    Any interested person may appeal to the Administrative Review Board 
for a review of a wage determination or its application made under this 
part, after reconsideration by the Administrator has been sought 
pursuant to Sec. 1.8 and denied. Any such appeal may, in the discretion 
of the Administrative Review Board, be received, accepted, and decided 
in accordance with the provisions of 29 CFR part 7 and such other 
procedures as the Board may establish.



                        Sec. Appendix A to Part 1

 Statutes Related to the Davis-Bacon Act Requiring Payment of Wages at 
              Rates Predetermined by the Secretary of Labor

    1. The Davis-Bacon Act (secs. 1-7, 46 Stat. 1494, as amended; Pub. 
L. 74-403, 40 U.S.C. 276a-276a-7).
    2. National Housing Act (sec. 212 added to c. 847, 48 Stat. 1246, by 
sec. 14, 53 Stat. 807; 12 U.S.C. 1715c and repeatedly amended).
    3. Housing Act of 1950 (college Housing) (amended by Housing Act of 
1959 to add labor provisions, 73 Stat. 681; 12 U.S.C. 1749a(f)).
    4. Housing Act of 1959 (sec. 401(f) of the Housing Act of 1950 as 
amended by Pub. L. 86-372, 73 Stat. 681; 12 U.S.C. 1701q(c)(3)).
    5. Commercial Fisheries Research and Development Act of 1964 (sec. 
7, 78 Stat. 199; 16 U.S.C. 779e(b)).
    6. Library Services and Construction Act (sec. 7(a), 78 Stat. 13; 20 
U.S.C. 355c(a)(4), as amended).
    7. National Technical Institute for the Deaf Act (sec. 5(b)(5), 79 
Stat. 126; 20 U.S.C. 684(b)(5)).
    8. National Foundation on the Arts and Humanities Act of 1965 (sec. 
5(k), 79 Stat. 846 as amended; 20 U.S.C. 954(j)).
    9. Elementary and Secondary Education Act of 1965 as amended by 
Elementary and Secondary and other Education Amendments of 1969 (sec. 
423 as added by Pub. L. 91-230, title IV, sec. 401(a)(10), 84 Stat. 169, 
and renumbered sec. 433, by Pub. L. 92-318; title III, sec. 301(a)(1), 
86 Stat. 326; 20 U.S.C. 1232(b)). Under the amendment coverage is 
extended to all programs administered by the Commissioner of Education.
    10. The Federal-Aid Highway Acts (72 Stat. 895, as amended by 82 
Stat. 821; 23 U.S.C. 113, as amended by the Surface Transportation 
Assistance Act of 1982, Pub. L. 97-424).
    11. Indians Self-Determination and Education Assistance Act (sec. 7, 
88 Stat. 2205; 25 U.S.C. 450e).
    12. Indian Health Care Improvement Act (sec. 303(b), 90 Stat. 1407; 
25 U.S.C. 1633(b)).
    13. Rehabilitation Act of 1973 (sec. 306(b)(5), 87 Stat. 384, 29 
U.S.C. 776(b)(5)).
    14. Comprehensive Employment and Training Act of 1973 (sec. 606, 87 
Stat. 880, renumbered sec. 706 by 83 Stat. 1845; 29 U.S.C. 986; also 
sec. 604, 88 Stat. 1846; 29 U.S.C. 964(b)(3)).
    15. State and Local Fiscal Assistance Act of 1972 (sec. 123(a)(6), 
86 Stat. 933; 31 U.S.C. 1246(a)(6)).
    16. Federal Water Pollution Control Act (sec. 513 of sec. 2, 86 
Stat. 894; 33 U.S.C. 1372).
    17. Veterans Nursing Home Care Act of 1964 (78 Stat. 502, as 
amended; 38 U.S.C. 5035(a)(8)).

[[Page 16]]

    18. Postal Reorganization Act (sec. 410(b)(4)(C); 84 Stat. 726 as 
amended; 39 U.S.C. 410(b)(4)(C)).
    19. National Visitors Center Facilities Act of 1968 (sec. 110, 82 
Stat. 45; 40 U.S.C. 808).
    Note: Section applying labor standards provisions of the Davis-Bacon 
Act repealed August 21, 2002, by 116 Stat. 1318, Pub. L. 107-217.
    20. Appalachian Regional Development Act of 1965 (sec. 402, 79 Stat. 
21; 40 U.S.C. 14701).
    21. Health Services Research, Health Statistics, and Medical 
Libraries Act of 1974 (sec. 107, see sec. 306(h)(2) thereof, 83 Stat. 
370, as amended by 90 Stat. 378; 42 U.S.C. 242m(h)(2)).
    22. Hospital Survey and Construction Act, as amended by the Hospital 
and Medical Facilities Amendments of 1964 (sec. 605(a)(5), 78 Stat. 453; 
42 U.S.C. 291e(a)(5)).
    23. Health Professions Education Assistance Act (sec. 303(b), 90 
Stat. 2254; 42 U.S.C. 293a(g)(1)(C); also sec. 308a, 90 Stat. 2256; 42 
U.S.C. 293a(c)(7)).
    24. Nurse Training Act of 1964 (sec. 941(a)(1)(C), 89 Stat. 364; 42 
U.S.C. 296a(b)(5)).
    25. Heart Disease, Cancer, and Stroke Amendments of 1965 (sec. 904, 
as added by sec. 2, 79 Stat. 928; 42 U.S.C. 299d(b)(4)).
    26. Safe Drinking Water Act (sec. 2(a), see sec. 1450e thereof, 88 
Stat. 1691; 42 U.S.C. 300j-9(e)).
    27. National Health Planning and Resources Act (sec. 4, see sec. 
1604(b)(1)(H), 88 Stat. 2261, 42 U.S.C. 300o-3(b)(1)(H)).
    28. U.S. Housing Act of 1937, as amended and recodified (88 Stat. 
667; 42 U.S.C. 1437j).
    29. Demonstration Cities and Metropolitan Development Act of 1966 
(secs. 110, 311, 503, 1003, 80 Stat. 1259, 1270, 1277, 1284; 42 U.S.C. 
3310; 12 U.S.C. 1715c; 42 U.S.C. 1437j).
    30. Slum clearance program: Housing Act of 1949 (sec. 109, 63 Stat. 
419, as amended; 42 U.S.C. 1459).
    31. Farm housing: Housing Act of 1964 (adds sec. 516(f) to Housing 
Act of 1949 by sec. 503, 78 Stat. 797; 42 U.S.C. 1486(f)).
    32. Housing Act of 1961 (sec. 707, added by sec. 907, 79 Stat. 496, 
as amended; 42 U.S.C. 1500c-3).
    33. Defense Housing and Community Facilities and Services Act of 
1951 (sec. 310, 65 Stat. 307; 42 U.S.C. 1592i).
    34. Special Health Revenue Sharing Act of 1975 (sec. 303, see sec. 
222(a)(5) thereof, 89 Stat. 324; 42 U.S.C. 2689j(a)(5)).
    35. Economic Opportunity Act of 1964 (sec. 607, 78 Stat. 532; 42 
U.S.C. 2947).
    36. Headstart, Economic Opportunity, and Community Partnership Act 
of 1974 (sec. 11, see sec. 811 thereof, 88 Stat. 2327; 42 U.S.C. 2992a).
    37. Housing and Urban Development Act of 1965 (sec. 707, 79 Stat. 
492 as amended; 42 U.S.C. 3107).
    38. Older Americans Act of 1965 (sec. 502, Pub. L. 89-73, as amended 
by sec. 501, Pub. L. 93-29; 87 Stat. 50; 42 U.S.C. 3041a(a)(4)).
    39. Public Works and Economic Development Act of 1965 (sec. 712, 79 
Stat. 575 as amended; 42 U.S.C. 3222).
    40. Juvenile Delinquency Prevention Act (sec. 1, 86 Stat. 536; 42 
U.S.C. 3884).
    41. New Communities Act of 1968 (sec. 410.82 Stat. 516; 42 U.S.C. 
3909).
    42. Urban Growth and New Community Development Act of 1970 (sec. 
727(f), 84 Stat. 1803; 42 U.S.C. 4529).
    43. Domestic Volunteer Service Act of 1973 (sec. 406, 87 Stat. 410; 
42 U.S.C. 5046).
    44. Housing and Community Development Act of 1974 (secs. 110, 
802(g), 83 Stat. 649, 724; 42 U.S.C. 5310, 1440(g)).
    45. Developmentally Disabled Assistance and Bill of Rights Act (sec. 
126(4), 89 Stat. 488; 42 U.S.C. 6042(4); title I, sec. 111, 89 Stat. 
491; 42 U.S.C. 6063(b)(19)).
    46. National Energy Conservation Policy Act (sec. 312, 92 Stat. 
3254; 42 U.S.C. 6371j).
    47. Public Works Employment Act of 1976 (sec. 109, 90 Stat. 1001; 42 
U.S.C. 6708; also sec. 208, 90 Stat. 1008; 42 U.S.C. 6728).
    48. Energy Conservation and Production Act (sec. 45(h), 90 Stat. 
1168; 42 U.S.C. 6881(h)).
    49. Solid Waste Disposal Act (sec. 2, 90 Stat. 2828; 42 U.S.C. 
6979).
    50. Rail Passenger Service Act of 1970 (sec. 405d, 84 Stat. 1337; 45 
U.S.C. 565(d)).
    51. Urban Mass Transportation Act of 1964 (sec. 10, 78 Stat. 307; 
renumbered sec. 13 by 88 Stat. 715; 49 U.S.C. 1609).
    52. Highway speed ground transportation study (sec. 6(b), 79 Stat. 
893; 49 U.S.C. 1636(b)).
    53. Airport and Airway Development Act of 1970 (sec. 22(b), 84 Stat. 
231; 49 U.S.C. 1722(b)).
    54. Federal Civil Defense Act of 1950 (50 U.S.C. App. 2281(i)).
    55. National Capital Transportation Act of 1965 (sec. 3(b)(4), 79 
Stat; 40 U.S.C. 682(b)(4)).
    Note: Repealed Dec. 9, 1969 and labor standards incorporated in sec. 
1-1431 of the District of Columbia Code.
    56. Model Secondary School for the Deaf Act (sec. 4, 80 Stat. 1027, 
Pub. L. 89-694, but not in the United States Code).
    57. Delaware River Basin Compact (sec. 15.1, 75 Stat. 714, Pub. L. 
87-328) (considered a statute for purposes of this part but not in the 
United States Code).
    58. Energy Security Act (sec. 175(c), Pub. L. 96-294, 94 Stat. 611; 
42 U.S.C. 8701 note).

[48 FR 19533, Apr. 29, 1983; 48 FR 20408, May 6, 1983, as amended at 70 
FR 50894, Aug. 26, 2005]

[[Page 17]]



                        Sec. Appendix B to Part 1

                            Northeast Region

    For the States of Connecticut, Delaware, District of Columbia, 
Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, 
Pennsylvania, Puerto Rico, Rhode Island, Vermont, Virgin Islands, 
Virginia and West Virginia:
    Regional Administrator, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, Curtis Center, 170 South 
Independence Mall West, Room 850 West, Philadelphia, PA 19106 
(Telephone: 215-861-5800, FAX: 215-861-5840).

                            Southeast Region

    For the States of Alabama, Florida, Georgia, Kentucky, Mississippi, 
North Carolina, South Carolina and Tennessee:
    Regional Administrator, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, 61 Forsyth Street, SW., Room 
7M40, Atlanta, GA 30303 (Telephone 404-893-4531, FAX: 404-893-4524).

                             Midwest Region

    For the States of Illinois, Indiana, Iowa, Kansas, Michigan, 
Minnesota, Missouri, Nebraska, Ohio and Wisconsin:
    Regional Administrator, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, 230 South Dearborn Street, 
Room 530, Chicago, IL 60604-1591 (Telephone: 312-596-7180, FAX: 312-596-
7205).

                            Southwest Region

    For the States of Arkansas, Colorado, Louisiana, Montana, New 
Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming:
    Regional Administrator, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, 525 South Griffin Street, 
Suite 800, Dallas, TX 75202-5007 (Telephone: 972-850-2600, FAX: 972-850-
2601).

                             Western Region

    For the States of Alaska, American Samoa, Arizona, California, Guam, 
Hawaii, Idaho, Nevada, Oregon and Washington:
    Regional Administrator, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, 71 Stevenson Street, Suite 
930, San Francisco, CA 94105, (Telephone: 415-848-6600, FAX: 415-848-
6655).

[70 FR 50895, Aug. 26, 2005]



PART 2_GENERAL REGULATIONS--Table of Contents



                            Subpart A_General

Sec.
2.1  Employees attached to regional offices.
2.2  Employees attached to Washington office.
2.3  Consent of the Secretary.
2.6  Claims collection.
2.7  Rulemaking.
2.8  Final agency decisions.

        Subpart B_Audiovisual Coverage of Administrative Hearings

2.10  Scope and purpose.
2.11  General principles.
2.12  Audiovisual coverage permitted.
2.13  Audiovisual coverage prohibited.
2.14  Proceedings in which the Department balances conflicting values.
2.15  Protection of witnesses.
2.16  Conduct of hearings.

                Subpart C_Employees Served With Subpoenas

2.20  Purpose, scope and definitions.
2.21  Procedure in the event of a demand for production or disclosure.
2.22  Production or disclosure prohibited unless approved by the 
          appropriate Deputy Solicitor of Labor.
2.23  Procedure where a decision concerning a demand is not made prior 
          to the time a response to the demand is required.
2.24  Procedure in the event of an adverse ruling.
2.25  Subpoenas served upon employees of the Office of the Inspector 
          General.

Subpart D_Equal Treatment in Department of Labor Programs for Religious 
 Organizations; Protection of Religious Liberty of Department of Labor 
               Social Service Providers and Beneficiaries

2.30  Purpose.
2.31  Definitions.
2.32  Equal participation of religious organizations.
2.33  Responsibilities of DOL, DOL social service providers and State 
          and local governments administering DOL support.
2.34  Beneficiary protections: written notice.
2.35  Beneficiary protections: referral requirements.
2.36  Application to State and local funds.
2.37  Effect of DOL support on Title VII employment nondiscrimination 
          requirements and on other existing statutes.
2.38  Status of nonprofit organizations.
2.39  Political or religious affiliation.

Appendix A to Part 2--Notice of Beneficiary Religious Liberty 
          Protections

[[Page 18]]

Appendix B to Part 2--Beneficiary Referral Request

    Authority: 5 U.S.C. 301; Executive Order 13198, 66 FR 8497, 3 CFR 
2001 Comp., p. 750; Executive Order 13279, 67 FR 77141, 3 CFR 2002 
Comp., p. 258; Executive Order 13559, 75 FR 71319, 3 CFR 2011 Comp., p. 
273.



                            Subpart A_General

    Source: 32 FR 11035, July 28, 1967, unless otherwise noted.



Sec. 2.1  Employees attached to regional offices.

    No person who has been an employee of the Department and attached to 
a Regional office of any bureau, board, division, or other agency 
thereof, shall be permitted to practice, appear, or act as attorney, 
agent, or representative before the Department or any branch or agent 
thereof in connection with any case or administrative proceeding which 
was pending before such Regional office during the time of his 
employment with the Department, unless he shall first obtain the written 
consent thereto of the Secretary of Labor or his duly authorized 
representative.



Sec. 2.2  Employees attached to Washington office.

    No person who has been an employee of the Department and attached to 
the Washington office of any bureau, board, division, or other agency 
thereof, shall be permitted to practice, appear, or act as attorney, 
agent, or representative before the Department or any branch or agent 
thereof, in connection with any case or administrative proceeding 
pending before such bureau, board, division, or other agency during the 
time of his employment with the Department, unless he shall first obtain 
the written consent thereto of the Secretary of Labor or his duly 
authorized representative.



Sec. 2.3  Consent of the Secretary.

    The consent of the Secretary or his duly authorized representative 
may be obtained as follows:
    The applicant shall file an application in the form of an affidavit. 
Such application, directed to the Secretary should:
    (a) State the former connection of the applicant with the 
Department;
    (b) Identify the matter in which the applicant desires to appear, 
and
    (c) Contain a statement to the effect that the applicant gave no 
personal consideration to such matter while he was an employee of the 
Department.

The application will be denied if the statements contained therein are 
disproved by an examination of the files, records, and circumstances 
pertaining to the matter, or if, in the opinion of the Secretary or his 
duly authorized representative, the public interest so requires. If the 
Secretary or his duly authorized representative is satisfied that the 
applicant gave no personal consideration to the matter in question while 
employed by the Department, and if he is satisfied that it is lawful and 
consistent with the public interest to do so, he may grant his consent, 
in writing, to the request of the applicant, subject to such conditions, 
if any, as he deems necessary and desirable. Any function of the 
Secretary under this section may be performed by the Under Secretary of 
Labor.



Sec. 2.6  Claims collection.

    (a) Authority of Department; incorporation by reference. The 
regulations in this section are issued under section 3 of the Federal 
Claims Collection Act of 1966, 31 U.S.C. 952. They incorporate herein 
and supplement as necessary for Department operation all provisions of 
the Joint Regulations of the Attorney General and the Comptroller 
General set forth in 4 CFR chap. II, which prescribe standards for 
administrative collection of civil claims by the Government for money or 
property, for the compromise, termination, or suspension of collection 
action, with respect to claims not exceeding $20,000, exclusive of 
interest, and for the referral of civil claims by the Government to the 
Government Accountability Office, and to the Department of Justice for 
litigation.
    (b) Designation. The Assistant Secretary for Administration and 
Management, and such heads of the Administrations and Offices of the 
Department of Labor as he may designate for such purpose, is authorized 
to perform all of

[[Page 19]]

the duties and exercise all of the authority of the Secretary under the 
Federal Claims Collection Act of 1966, the aforementioned Joint 
Regulations of the Attorney General and the Comptroller General, and the 
regulations in this section.

(Sec. 3, 80 Stat. 309; 31 U.S.C. 952)

[34 FR 9122, June 10, 1969, as amended at 72 FR 37098, July 9, 2007]



Sec. 2.7  Rulemaking.

    It is the policy of the Secretary of Labor, that in applying the 
rulemaking provisions of the Administrative Procedure Act (5 U.S.C. 
553), the exemption therein for matters relating to public property, 
loans, grants, benefits or contracts shall not be relied upon as a 
reason for not complying with the notice and public participation 
requirements thereof except for all information-gathering procedures 
adopted by the Bureau of Labor Statistics.

[46 FR 35, Jan. 2, 1981]



Sec. 2.8  Final agency decisions.

    Final agency decision issued under the statutory authority of the 
U.S. Department of Labor may be issued by the Secretary of Labor, or by 
his or her designee under a written delegation of authority. The 
Administrative Review Board, an organizational entity within the Office 
of the Secretary, has been delegated authority to issue final agency 
decisions under the statutes, executive orders, and regulations as 
provided in Secretary's Order 2-96, published on May 3, 1996.

[61 FR 19984, May 3, 1996]



        Subpart B_Audiovisual Coverage of Administrative Hearings

    Source: 38 FR 5631, Mar. 2, 1973, unless otherwise noted.



Sec. 2.10  Scope and purpose.

    This subpart defines the scope of audiovisual coverage of 
departmental administrative hearings. It describes the types of 
proceedings where such coverage is encouraged, defines areas where such 
coverage is prohibited (as in certain enforcement proceedings or where 
witnesses object) and areas where a decision concerning coverage is made 
after weighing the values involved in permitting coverage against the 
reasons for not permitting it.



Sec. 2.11  General principles.

    The following general principles will be observed in granting or 
denying requests for permission to cover hearings audiovisually:
    (a) Notice and comment and on-the-record rule making proceedings may 
involve administrative hearings. If such administrative hearings are 
held, we encourage their audiovisual coverage.
    (b) Audiovisual coverage shall be excluded in adjudicatory 
proceedings involving the rights or status of individuals (including 
those of small corporations likely to be indistinguishable in the public 
mind from one or a few individuals) in which an individual's past 
culpable conduct or other aspect of personal life is a primary subject 
of adjudication, and where the person in question objects to coverage.
    (c) Certain proceedings involve balancing of conflicting values in 
order to determine whether audiovisual coverage should be allowed. Where 
audiovisual coverage is restricted, the reasons for the restriction 
shall be stated in the record.



Sec. 2.12  Audiovisual coverage permitted.

    The following are the types of hearings where the Department 
encourages audiovisual coverage:
    (a) All hearings involving notice and comment and on-the-record rule 
making proceedings. The Administrative Procedure Act provides for notice 
of proposed rule making with provision for participation by interested 
parties through submission of written data, views, or arguments, with or 
without opportunity for oral presentation (5 U.S.C. 553). (In many cases 
the Department follows the above procedure in matters exempted from 
these requirements of 5 U.S.C. 553.) On-the-record rule making 
proceedings under 5 U.S.C. 556 and 557 are also hearings where 
audiovisual coverage of hearings is encouraged. Examples of hearings 
encompassed by this paragraph are:
    (1) Hearings to establish or amend safety or health standards under 
the

[[Page 20]]

Occupational Safety and Health Act of 1970, 29 U.S.C. 651.
    (2) Hearings to determine the adequacy of State laws under the 
Occupational Safety and Health Act of 1970.
    (b) Hearings to collect or review wage data upon which to base 
minimum wage rates determined under various laws, such as the Davis-
Bacon Act (40 U.S.C. 276a) and related statutes and the Service Contract 
Act of 1965 (41 U.S.C. 353, as amended by Pub. L. 92-473 approved 
October 9, 1972).
    (c) Hearings under section 4(c) of the Service Contract Act of 1965 
(41 U.S.C. 353, subsection (c) added by Pub. L. 92-473 approved October 
9, 1972) to determine if negotiated rates are substantially at variance 
with those which prevail in the locality for services of a character 
similar.
    (d) Hearings before the Administrative Review Board (parts 1, 3, 5, 
and 7 of this chapter).
    (e) Hearings held at the request of a Federal agency to resolve 
disputes under the Davis-Bacon and related Acts, involving prevailing 
wage rates or proper classification which involve significant sums of 
money, large groups of employees or novel or unusual situations.
    (f) Hearings of special industry committees held pursuant to the 
Fair Labor Standards Act, as amended (29 U.S.C. 201 et seq.) for the 
purpose of recommending minimum wage rates to be paid in Puerto Rico, 
the Virgin Islands, and American Samoa.
    (g) Hearings pursuant to section 13(a) of the Welfare and Pension 
Plans Disclosure Act (29 U.S.C. 308d) to determine whether a bond in 
excess of $500,000 may be prescribed.
    (h) Hearings where the Department is requesting information needed 
for its administrative use in determining what our position should be 
(e.g., our hearings on the 4-day, 40-hour workweek).

[38 FR 5631, Mar. 2, 1973, as amended at 61 FR 19984, May 3, 1996]



Sec. 2.13  Audiovisual coverage prohibited.

    The Department shall not permit audiovisual coverage of the 
following types of hearings if any party objects:
    (a) Hearings to determine whether applications for individual 
variances should be issued under the Occupational Safety and Health Act 
of 1970.
    (b) Hearings (both formal and informal) involving alleged violations 
of various laws such as the Davis-Bacon Act (40 U.S.C. 276a, et seq.) 
and related Acts, the Contract Work Hours and Safety Standards Act (40 
U.S.C. 327 et seq.), the Service Contract Act (41 U.S.C. 351 et seq.), 
the Walsh Healey Act (41 U.S.C. 35 et seq.), under section 41 of the 
Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. 941 et 
seq.), the Fair Labor Standards Act of 1938, as amended (29 U.S.C. 201 
et seq.), and any informal hearings or conferences under the 
Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq.) which 
are not within the jurisdiction of the Occupational Safety and Health 
Commission.
    (c) Adversary hearings under the Longshoremen's and Harbor Workers' 
Compensation Act (33 U.S.C. 901 et seq.) and related Acts, which 
determine an employee's right to compensation.
    (d) Hearings which determine an employee's right to compensation 
under the Federal Employees' Compensation Act (5 U.S.C. 8101 et seq.).



Sec. 2.14  Proceedings in which the Department balances conflicting values.

    In proceedings not covered by Secs. 2.12 and 2.13, the Department 
should determine whether the public's right to know outbalances the 
individual's right to privacy. When audiovisual coverage is restricted 
or excluded, the record shall state fully the reasons for such 
restriction or exclusion. For example, there would be included in this 
category hearings before the Board of Contract Appeals involving appeals 
from contracting officer decisions involving claims for extra costs for 
extra work, extra costs for delay in completion caused by the Government 
or for changes in the work, conformity hearings arising under State 
unemployment insurance laws, etc.

[[Page 21]]



Sec. 2.15  Protection of witnesses.

    A witness has the right, prior to or during his testimony, to 
exclude audiovisual coverage of his testimony in any hearing being 
covered audiovisually.



Sec. 2.16  Conduct of hearings.

    The presiding officer at each hearing which is audiovisually covered 
is authorized to take any steps he deems necessary to preserve the 
dignity of the hearing or prevent its disruption by persons setting up 
or using equipment needed for its audiovisual coverage.



                Subpart C_Employees Served With Subpoenas

    Authority: 5 U.S.C. 301 and Reorganization Plan No. 6 of 1950, 15 FR 
3174, 64 Stat. 1263.

    Source: 46 FR 49543, Oct. 6, 1981, unless otherwise noted.



Sec. 2.20  Purpose, scope and definitions.

    (a) This subpart sets forth the procedures to be followed whenever a 
subpoena, order, or other demand (hereinafter referred to as a demand) 
of a court or other authority, in connection with a proceeding to which 
the U.S. Department of Labor is not a party, is issued for the 
production or disclosure of (1) any material contained in the files of 
the Department, (2) any information relating to material contained in 
the files of the Department, or (3) any information or material acquired 
by any person while such person was an employee of the Department as a 
part of the performance of his official duties or because of his 
official status.
    (b) For purposes of this subpart, the term employee of the 
Department includes all officers and employees of the United States 
Department of Labor appointed by, or subject to the supervision, 
jurisdiction, or control of the Secretary of Labor.
    (c)(1) For purposes of this subpart, the term appropriate Deputy 
Solicitor of Labor means the Deputy Solicitor of Labor for National 
Operations when the person served with a demand is either employed by 
the National Office of the Labor Department, or who is a former Labor 
Department employee and is served with a demand in Washington, DC. In 
all other cases, the term appropriate Deputy Solicitor of Labor means 
the Deputy Solicitor of Labor for Regional Operations.
    (2) For purposes of this subpart, the term appropriate Office of the 
Solicitor means that Office of the Associate Solicitor of Labor (in 
Washington, DC) serving as counsel to the program to which the demand 
relates, where the person served with a demand is employed by the 
National Office of the Labor Department, or who is a former Labor 
Department employee and is served with a demand in Washington, DC. In 
all other cases, the term appropriate Office of the Solicitor means that 
Regional Solicitor's Office or Associate Regional Solicitor's Office 
serving the locality in which the employee or former employee is served 
with a demand.
    (d) This subpart is intended to provide instructions regarding the 
internal operations of the Department of Labor, and is not intended, and 
does not, and may not, be relied upon to create any right or benefit, 
substantive or procedural, enforceable at law by a party against the 
Department of Labor.



Sec. 2.21  Procedure in the event of a demand for production or 
disclosure.

    Whenever an employee or former employee of the Department receives a 
demand for the production of material or the disclosure of information 
described in Sec. 2.20(a), he shall immediately notify the appropriate 
Office of the Solicitor. The appropriate Office of the Solicitor shall 
be furnished by the party causing the subpoena to be issued with a 
written summary of the information sought and its relevance to the 
proceeding in connection with which it was served. The Associate 
Solicitor, Regional Solicitor, or Associate Regional Solicitor, 
whichever is appropriate, may waive the requirement that a written 
summary be furnished where he or she deems it to be unnecessary. The 
election to waive the requirement of a written summary in no way 
constitutes a waiver of any other requirement set forth in this subpart.

[[Page 22]]



Sec. 2.22  Production or disclosure prohibited unless approved by
the appropriate Deputy Solicitor of Labor.

    In terms of instructing an employee or former employee of the manner 
in which to respond to a demand, the Associate Solicitor, Regional 
Solicitor, or Associate Regional Solicitor, whichever is applicable, 
shall follow the instructions of the appropriate Deputy Solicitor of 
Labor. No employee or former employee of the Department of Labor shall, 
in response to a demand of a court or other authority, produce any 
material contained in the files of the Department or disclose any 
information relating to material contained in the files of the 
Department, or disclose any information or produce any material acquired 
as part of the performance of his official duties or because of his 
official status without approval of the appropriate Deputy Solicitor of 
Labor.



Sec. 2.23  Procedure where a decision concerning a demand is not
made prior to the time a response to the demand is required.

    If the response to the demand is required before the instructions 
from the appropriate Deputy Solicitor of Labor are received, a 
Department attorney or other government attorney designated for the 
purpose shall appear with the employee or former employee of the 
Department upon whom the demand has been made, and shall furnish the 
court or other authority with a copy of the regulations contained in 
this subpart and inform the court or other authority that the demand has 
been, or is being, as the case may be, referred for the prompt 
consideration of the appropriate Deputy Solicitor of Labor and shall 
respectfully request the court or other authority to stay the demand 
pending receipt of the requested instructions.



Sec. 2.24  Procedure in the event of an adverse ruling.

    If the court or other authority declines to stay the effect of the 
demand in response to a request made in accordance with Sec. 2.23 
pending receipt of instructions, or if the court or other authority 
rules that the demand must be complied with irrespective of instructions 
not to produce the material or disclose the information sought, the 
employee or former employee upon whom the demand has been made shall 
respectfully decline to comply with the demand, ``United States ex rel 
Touhy v. Ragen,'' 340 US. 462.



Sec. 2.25  Subpoenas served upon employees of the Office of the
Inspector General.

    Notwithstanding the requirements set forth in Secs. 2.20 through 
2.24, this subpart is applicable to demands served on employees or 
former employees of the Office of the Inspector General (OIG), except 
that wherever in Secs. 2.21 through 2.24 there appear the phrases 
appropriate Office of the Solicitor, Associate Solicitor, Regional 
Solicitor, or Associate Regional Solicitor, and appropriate Deputy 
Solicitor of Labor, there shall be substituted in lieu thereof the 
Inspector General or Deputy Inspector General. In addition, the first 
sentence of Sec. 2.22 shall not be applicable to subpoenas served upon 
employees or former employees of the Office of the Inspector General.



Subpart D_Equal Treatment in Department of Labor Programs for Religious 
 Organizations; Protection of Religious Liberty of Department of Labor 
               Social Service Providers and Beneficiaries

    Source: 69 FR 41891, July 12, 2004, unless otherwise noted.



Sec. 2.30  Purpose.

    The purpose of the regulations in this subpart is to ensure that 
DOL-supported social service programs are open to all qualified 
organizations, regardless of the organizations' religious character, and 
to establish clearly the permissible uses to which DOL support for 
social service programs may be put, and the conditions for receipt of 
such support. In addition, this proposed rule is designed to ensure that 
the Department's social service programs are implemented in a manner 
consistent with the requirements of the Constitution, including the 
Religion Clauses of the First Amendment.

[[Page 23]]



Sec. 2.31  Definitions.

    As used in the regulations in this subpart:
    (a) The term Federal financial assistance means assistance that non-
Federal entities (including State and local governments) receive or 
administer in the form of grants, contracts, loans, loan guarantees, 
property, cooperative agreements, direct appropriations, or other direct 
or indirect assistance, but does not include a tax credit, deduction or 
exemption. Federal financial assistance may be direct or indirect.
    (1) The term direct Federal financial assistance or Federal 
financial assistance provided directly means that the Government or a 
DOL social service intermediary provider under this part selects the 
provider and either purchases services from that provider (e.g., via a 
contract) or awards funds to that provider to carry out a service (e.g., 
via grant or cooperative agreement). In general, Federal financial 
assistance shall be treated as direct, unless it meets the definition of 
indirect Federal financial assistance or Federal financial assistance 
provided indirectly.
    (2) The term indirect Federal financial assistance or Federal 
financial assistance provided indirectly means that the choice of the 
service provider is placed in the hands of the beneficiary, and the cost 
of that service is paid through a voucher, certificate, or other similar 
means of government-funded payment. Federal financial assistance 
provided to an organization is considered indirect when:
    (i) The Government program through which the beneficiary receives 
the voucher, certificate, or other similar means of Government-funded 
payment is neutral toward religion;
    (ii) The organization receives the assistance as a result of a 
decision of the beneficiary, not a decision of the government; and
    (iii) The beneficiary has at least one adequate secular option for 
the use of the voucher, certificate, or other similar means of 
Government-funded payment.
    (3) The recipient of sub-awards received through programs 
administered by States or other intermediaries that are themselves 
recipients of Federal financial assistance (e.g., local areas that 
receive within-state allocations to provide workforce services under 
title I of the Workforce Innovation and Opportunity Act) are not 
considered recipients of indirect Federal financial assistance or 
recipients of Federal financial assistance provided indirectly as those 
terms are used in Executive Order 13559. These recipients of sub-awards 
are considered recipients of direct Federal financial assistance.
    (b) The term social service program means a program that is 
administered or supported by the Federal Government, or by a State or 
local government using Federal financial assistance, and that provides 
services directed at reducing poverty, improving opportunities for low-
income children, revitalizing low-income communities, empowering low-
income families and low-income individuals to become self-sufficient, or 
otherwise helping people in need. Such programs include, but are not 
limited to, the following:
    (1) Child care services and services to meet the special needs of 
children, older individuals, and individuals with disabilities 
(including physical, mental, or emotional disabilities);
    (2) Job training and related services, and employment services;
    (3) Information, referral, and counseling services;
    (4) Literacy and mentoring programs; and
    (5) Services for the prevention and treatment of juvenile 
delinquency and substance abuse, services for the prevention of crime 
and the provision of assistance to the victims and the families of 
criminal offenders, and services related to intervention in, and 
prevention of domestic violence.
    (c) The term DOL means the U.S. Department of Labor.
    (d) The term DOL-supported social service program, DOL social 
service program, or DOL program means a social service program, as 
defined in paragraph (b) of this section, that is administered by or for 
DOL with DOL support. Such programs include, but are not limited to, the 
One Stop Career Center System, the Job Corps, and other programs 
supported through the Workforce Investment Act.

[[Page 24]]

    (e) The term DOL social service provider means any non-Federal 
organization, other than a State or local government, that seeks or 
receives DOL support as defined in paragraph (g) of this section, or 
participates in DOL programs other than as the ultimate beneficiary of 
such programs.
    (f) The term DOL social service intermediary provider means any DOL 
social service provider, including a non-governmental organization, 
that, as part of its duties, selects subgrantees to receive DOL support 
or subcontractors to provide DOL-supported services, or has the same 
duties under this part as a governmental entity.
    (g) The term DOL support means Federal financial assistance, as well 
as procurement funding provided to a non-Federal organization, including 
a State or local government, to support the organization's 
administration of or participation in a DOL social service program as 
defined in paragraph (d) of this section.

[69 FR 41891, July 12, 2004, as amended at 81 FR 19421, Apr. 4, 2016]



Sec. 2.32  Equal participation of religious organizations.

    (a) Religious organizations must be eligible, on the same basis as 
any other organization, to seek DOL support or participate in DOL 
programs for which they are otherwise eligible. DOL, DOL social service 
intermediary providers, as well as State and local governments 
administering DOL support, must not discriminate for or against an 
organization on the basis of the organization's religious character or 
affiliation, although this requirement does not preclude DOL, DOL social 
service providers, or State and local governments administering DOL 
support from accommodating religion in a manner consistent with the 
Establishment Clause. In addition, because this rule does not affect 
existing constitutional requirements, DOL, DOL social service providers 
(insofar as they may otherwise be subject to any constitutional 
requirements), and State and local governments administering DOL support 
must continue to comply with otherwise applicable constitutional 
principles, including, among others, those articulated in the 
Establishment, Free Speech, and Free Exercise Clauses of the First 
Amendment to the Constitution.
    (b) A religious organization that is a DOL social service provider 
retains its independence from Federal, State, and local governments and 
must be permitted to continue to carry out its mission, including the 
definition, development, practice, and expression of its religious 
beliefs, subject to the provisions of Sec. 2.33. Among other things, 
such a religious organization must be permitted to:
    (1) Use its facilities to provide DOL-supported social services 
without removing or altering religious art, icons, scriptures, or other 
religious symbols from those facilities; and
    (2) Retain its authority over its internal governance, including 
retaining religious terms in its name, selecting its board members on a 
religious basis, and including religious references in its mission 
statements and other governing documents.
    (c) A grant document, contract or other agreement, covenant, 
memorandum of understanding, policy, or regulation that is used by DOL, 
a State or local government administering DOL support, or a DOL social 
service intermediary provider must not require only religious 
organizations to provide assurances that they will not use direct DOL 
support for explicitly religious activities (including activities that 
involve overt religious content, such as worship, religious instruction, 
or proselytization). Any such requirements must apply equally to both 
religious and other organizations. All organizations, including 
religious ones, that are DOL social service providers must carry out 
DOL-supported activities in accordance with all applicable legal and 
programmatic requirements, including those prohibiting the use of direct 
DOL support for explicitly religious activities (including activities 
that involve overt religious content, such as worship, religious 
instruction, or proselytization). A grant document, contract or other 
agreement, covenant, memorandum of understanding, policy, or regulation 
that is used by DOL, a State or local government, or a DOL social 
service intermediary provider in administering a DOL social service

[[Page 25]]

program must not disqualify organizations from receiving DOL support or 
participating in DOL programs on the grounds that such organizations are 
motivated or influenced by religious faith to provide social services, 
have a religious character or affiliation, or lack a religious 
component.

[69 FR 41891, July 12, 2004, as amended at 81 FR 19421, Apr. 4, 2016]



Sec. 2.33  Responsibilities of DOL, DOL social service providers and 
State and local governments administering DOL support.

    (a) Any organization that participates in a program funded by 
federal financial assistance shall not, in providing services or in 
outreach activities related to such services, discriminate against a 
current or prospective program beneficiary on the basis of religion, 
religious belief, a refusal to hold a religious belief, or a refusal to 
attend or participate in a religious practice. However, an organization 
that participates in a program funded by indirect financial assistance 
need not modify its program activities to accommodate a beneficiary who 
chooses to expend the indirect aid on the organization's program. This 
requirement does not preclude DOL, DOL social service intermediary 
providers, or State or local governments administering DOL support from 
accommodating religion in a manner consistent with the Establishment 
Clause of the First Amendment to the Constitution.
    (b)(1) DOL, DOL social service intermediary providers, DOL social 
service providers, and State and local governments administering DOL 
support must ensure that they do not use direct DOL support for 
explicitly religious activities (including activities that involve overt 
religious content such as worship, religious instruction, or 
proselytization). DOL social service providers must be permitted to 
offer explicitly religious activities so long as they offer those 
activities separately in time or location from social services receiving 
direct DOL support, and participation in the explicitly religious 
activities is voluntary for the beneficiaries of social service programs 
receiving direct DOL support. For example, participation in an 
explicitly religious activity must not be a condition for participating 
in a directly-supported social service program.
    (2) This regulation is not intended to and does not restrict the 
exercise of rights or duties guaranteed by the Constitution. For 
example, program officials must not impermissibly restrict the ability 
of program beneficiaries or DOL social service providers to freely 
express their views and to exercise their right to religious freedom. 
Additionally, subject to reasonable and permissible time, place and 
manner restrictions, residential facilities that receive DOL support 
must permit residents to engage in voluntary religious activities, 
including holding religious services, at these facilities.
    (3) Notwithstanding the requirements of paragraph (b)(1) of this 
section, and to the extent otherwise permitted by Federal law (including 
constitutional requirements), direct DOL support may be used to support 
explicitly religious activities (including activities that involve overt 
religious content such as worship, religious instruction, or 
proselytization), and such activities need not be provided separately in 
time or location from other DOL-supported activities, under the 
following circumstances:
    (i) Where DOL support is provided to chaplains to work with inmates 
in prisons, detention facilities, or community correction centers 
through social service programs;
    (ii) Where DOL support is provided to social service programs in 
prisons, detention facilities, or community correction centers, in which 
social service organizations assist chaplains in carrying out their 
duties; or
    (iii) Where DOL-supported social service programs involve such a 
degree of government control over the program environment that religious 
exercise would be significantly burdened absent affirmative steps by DOL 
or its social service providers.
    (c) If a DOL social service intermediary provider, acting under a 
contract, grant, or other agreement with the Federal Government or with 
a State or local government that is administering a program supported by 
Federal financial assistance, is given the authority under the contract,

[[Page 26]]

grant, or agreement to select non-governmental organizations to provide 
services funded by the Federal Government, the DOL social service 
intermediary provider must ensure compliance with the provisions of 
Executive Order 13279, as amended by Executive Order 13559, and any 
implementing rules or guidance, by the recipient of a contract, grant or 
agreement. If the DOL social service intermediary provider is a non-
governmental organization, it retains all other rights of a non-
governmental organization under the program's statutory and regulatory 
provisions.

[69 FR 41891, July 12, 2004, as amended at 81 FR 19421, Apr. 4, 2016]



Sec. 2.34  Beneficiary protections: written notice.

    (a) Contents. Religious organizations providing social services to 
beneficiaries under a DOL program supported by direct Federal financial 
assistance must give written notice to beneficiaries and prospective 
beneficiaries of certain protections. Such notice must be given in a 
manner prescribed by DOL, and state that:
    (1) The organization may not discriminate against a beneficiary or 
prospective beneficiary on the basis of religion or religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice;
    (2) The organization may not require beneficiaries to attend or 
participate in any explicitly religious activities (including activities 
that involve overt religious content such as worship, religious 
instruction, or proselytization) that are offered by our organization, 
and any participation by beneficiaries in such activities must be purely 
voluntary;
    (3) The organization must separate out in time or location any 
privately-funded explicitly religious activities (including activities 
that involve overt religious content such as worship, religious 
instruction, or proselytization) from activities supported with direct 
Federal financial assistance;
    (4) If a beneficiary objects to the religious character of the 
organization, the organization must make reasonable efforts to identify 
and refer the beneficiary to an alternative provider to which the 
beneficiary has no objection. The organization cannot guarantee, 
however, that in every instance, an alternative provider will be 
available; and
    (5) Beneficiaries or prospective beneficiaries may report violations 
of these protections to, or file a written complaint of any denials of 
services or benefits by an organization with, the U.S. Department of 
Labor's Civil Rights Center. The required language of the notice is set 
forth in appendix A to these regulations and may be downloaded from the 
Civil Rights Center's Web site at http://www.dol.gov/oasam/programs/crc 
or at the Center for Faith-Based and Neighborhood Partnerships' Web site 
at http://www.dol.gov/cfbnp. DOL social service providers may post and 
distribute exact duplicate copies of the notice, including through 
electronic means.
    (b) Timing of notice. This written notice must be given to 
beneficiaries prior to the time they enroll in the program or receive 
services from such programs. When the nature of the service provided or 
exigent circumstances make it impracticable to provide such written 
notice in advance of the actual service, DOL social service providers 
must advise beneficiaries of their protections at the earliest available 
opportunity.
    (c) Applicability. The obligations in this subsection apply only to 
religious organizations providing services under social service programs 
administered in the United States.

[81 FR 19423, Apr. 4, 2016]



Sec. 2.35  Beneficiary protections: referral requirements.

    (a) If a beneficiary or prospective beneficiary of a social service 
program supported by direct DOL financial assistance objects to the 
religious character of an organization that provides services under the 
program, that organization must promptly undertake reasonable efforts to 
identify and refer the beneficiary or prospective beneficiary to an 
alternative provider to which the beneficiary or the prospective 
beneficiary has no objection.

[[Page 27]]

    (b) A referral may be made to another religious organization, if the 
beneficiary has no objection to that provider. But if the beneficiary 
requests a secular provider, and a secular provider is available, then a 
referral must be made to that provider.
    (c) Except for services provided by telephone, internet, or similar 
means, the referral must be to an alternative provider that is in 
reasonable geographic proximity to the organization making the referral 
and that offers services that are similar in substance and quality to 
those offered by that organization. The alternative provider also must 
have the capacity to accept additional clients.
    (d) When the organization makes a referral to an alternative 
provider, the organization shall maintain a record of that referral for 
review by the awarding entity. When the organization determines that it 
is unable to identify an alternative provider, the organization shall 
promptly notify and maintain a record for review by the awarding entity. 
If the organization is unable to identify an alternative provider, the 
awarding entity shall determine whether there is any other suitable 
alternative provider to which the beneficiary may be referred.
    (e) A DOL social service intermediary provider that receives a 
request for assistance in identifying an alternative provider may 
request assistance from DOL.
    (f) The obligations in this section apply only to religious 
organizations providing services under social service programs 
administered in the United States.

[81 FR 19423, Apr. 4, 2016]



Sec. 2.36  Application to State and local funds.

    If a State or local government voluntarily contributes its own funds 
to supplement activities carried out under the applicable programs, the 
State or local government has the option to separate out the Federal 
funds or commingle them. If the funds are commingled, then the 
provisions of this subpart apply to all of the commingled funds in the 
same manner, and to the same extent, as the provisions apply to the 
Federal assistance. State funds that are contributed pursuant to the 
requirements of a matching or grant agreement are considered to be 
commingled funds.

[69 FR 41891, July 12, 2004. Redesignated at 81 FR 19423, Apr. 4, 2016]



Sec. 2.37  Effect of DOL support on Title VII employment 
nondiscrimination requirements and on other existing statutes.

    A religious organization's exemption from the Federal prohibition on 
employment discrimination on the basis of religion, set forth in 
Sec. 702(a) of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e-1, is 
not forfeited when the organization receives direct or indirect DOL 
support. Some DOL programs, however, were established through Federal 
statutes containing independent statutory provisions requiring that 
recipients refrain from discriminating on the basis of religion. 
Accordingly, to determine the scope of any applicable requirements, 
recipients and potential recipients should consult with the appropriate 
DOL program official or with the Civil Rights Center, U.S. Department of 
Labor, 200 Constitution Avenue, NW., Room N4123, Washington, DC 20210, 
(202) 693-6500. Individuals with hearing or speech impairments may 
access this telephone number via TTY by calling the toll-free Federal 
Information Relay Service at 1-800-877-8339.

[69 FR 41891, July 12, 2004. Redesignated at 81 FR 19423, Apr. 4, 2016]



Sec. 2.38  Status of nonprofit organizations.

    (a) In general, DOL does not require that an organization, including 
a religious organization, obtain tax-exempt status under section 
501(c)(3) of the Internal Revenue Code in order to be eligible for 
Federal financial assistance under DOL social service programs. Many 
such programs, however, do require an organization to be a ``nonprofit 
organization'' in order to be eligible for such support. Individual 
solicitations that require organizations to have nonprofit status must 
specifically so indicate in the eligibility section of the solicitation. 
In addition, any solicitation for a program that requires an 
organization to maintain tax-exempt status must expressly state the

[[Page 28]]

statutory authority for requiring such status. For assistance with 
questions about a particular solicitation, applicants should contact the 
DOL program office that issued the solicitation.
    (b) Unless otherwise provided by statute, in DOL programs in which 
an applicant must show that it is a nonprofit organization, the 
applicant must be permitted to do so by any of the following means:
    (1) Proof that the Internal Revenue Service currently recognizes the 
applicant as tax exempt under section 501(c)(3) of the Internal Revenue 
Code;
    (2) A statement from a State taxing body or the State Secretary of 
State certifying that:
    (i) The organization is a nonprofit organization operating within 
the State; and
    (ii) No part of its net earnings may lawfully benefit any private 
shareholder or individual;
    (3) A certified copy of the applicant's certificate of incorporation 
or similar document that clearly establishes the nonprofit status of the 
applicant; or
    (4) Any item described in paragraphs (b)(1) through (b)(3) of this 
section, if that item applies to a State or national parent 
organization, together with a statement by the State or national parent 
organization that the applicant is a local nonprofit affiliate of the 
organization.

[69 FR 41891, July 12, 2004. Redesignated at 81 FR 19423, Apr. 4, 2016]



Sec. 2.39  Political or religious affiliation.

    Decisions about awards of Federal financial assistance must be free 
from political interference or even the appearance of such interference 
and must be made on the basis of merit, not on the basis of religion or 
religious belief or lack thereof.

[81 FR 19423, Apr. 4, 2016]



   Sec. Appendix A to Part 2--Notice of Beneficiary Religious Liberty 
                               Protections

    [Insert Name of Organization]:
    [Insert Name of Program]:
    [Insert Contact information for Program Staff (name, phone number, 
and email address, if appropriate)]:
________________________________________________________________________
    Because this program is supported in whole or in part by financial 
assistance from the Federal Government, we are required to let you know 
that:
    (1) We may not discriminate against you on the basis of religion or 
religious belief, a refusal to hold a religious belief, or a refusal to 
attend or participate in a religious practice;
    (2) We may not require you to attend or participate in any 
explicitly religious activities (including activities that involve overt 
religious content such as worship, religious instruction, or 
proselytization) that are offered by our organization, and any 
participation by beneficiaries in such activities must be purely 
voluntary;
    (3) We must separate out in time or location any privately-funded 
explicitly religious activities (including activities that involve overt 
religious content such as worship, religious instruction, or 
proselytization) from activities supported with direct Federal financial 
assistance;
    (4) If you object to the religious character of an organization, we 
must make reasonable efforts to identify and refer you to an alternative 
provider to which you have no objection. We cannot guarantee, however, 
that in every instance, an alternative provider will be available; and
    (5) You may report violations of these protections to, or file a 
written complaint of any denials of services or benefits by an 
organization, with the U.S. Department of Labor's Civil Rights Center, 
200 Constitution Ave. NW., Room N-4123, Washington, DC 20210, or by 
email to [email protected]
    This written notice must be given to you prior to the time you 
enroll in the program or receive services from such programs, unless the 
nature of the service provided or urgent circumstances makes it 
impracticable to provide such notice in advance of the actual service. 
In such an instance, this notice must be given to you at the earliest 
available opportunity.
--End of Form --

[81 FR 19423, Apr. 4, 2016]



         Sec. Appendix B to Part 2--Beneficiary Referral Request

    If you object to receiving services from us based on the religious 
character of our organization, please complete this form and return it 
to the program contact identified above. If you object, we will make 
reasonable efforts to refer you to another service provider. With your 
consent, we will follow up with you or the organization to which you 
were referred to determine whether you contacted that organization.
    Please check if applicable:

[[Page 29]]

(  ) I want to be referred to another service provider.
    If you checked above that you wish to be referred to another service 
provider, please check one of the following:
(  ) Please follow up with me.
    Name:
    Best way to reach me (phone/address/email):
(  ) Please follow up with the other service provider.
(  ) Please do not follow up.
--End of Form--

[81 FR 19423, Apr. 4, 2016]



PART 3_CONTRACTORS AND SUBCONTRACTORS ON PUBLIC BUILDING OR PUBLIC 
WORK FINANCED IN WHOLE OR IN PART BY LOANS OR GRANTS FROM THE UNITED
STATES--Table of Contents



Sec.
3.1  Purpose and scope.
3.2  Definitions.
3.3  Weekly statement with respect to payment of wages.
3.4  Submission of weekly statements and the preservation and inspection 
          of weekly payroll records.
3.5  Payroll deductions permissible without application to or approval 
          of the Secretary of Labor.
3.6  Payroll deductions permissible with the approval of the Secretary 
          of Labor.
3.7  Applications for the approval of the Secretary of Labor.
3.8  Action by the Secretary of Labor upon applications.
3.9  Prohibited payroll deductions.
3.10  Methods of payment of wages.
3.11  Regulations part of contract.

    Authority: R.S. 161, sec. 2, 48 Stat. 848; Reorg. Plan No. 14 of 
1950, 64 Stat. 1267; 5 U.S.C. 301; 40 U.S.C. 3145; Secretary's Order 01-
2014 (Dec. 19, 2014), 79 FR 77527 (Dec. 24, 2014).

    Source: 29 FR 97, Jan. 4, 1964, unless otherwise noted.



Sec. 3.1  Purpose and scope.

    This part prescribes ``anti-kickback'' regulations under section 2 
of the Act of June 13, 1934, as amended (40 U.S.C. 276c), popularly 
known as the Copeland Act. This part applies to any contract which is 
subject to Federal wage standards and which is for the construction, 
prosecution, completion, or repair of public buildings, public works or 
buildings or works financed in whole or in part by loans or grants from 
the United States. The part is intended to aid in the enforcement of the 
minimum wage provisions of the Davis-Bacon Act and the various statutes 
dealing with federally assisted construction that contain similar 
minimum wage provisions, including those provisions which are not 
subject to Reorganization Plan No. 14 (e.g., the College Housing Act of 
1950, the Federal Water Pollution Control Act, and the Housing Act of 
1959), and in the enforcement of the overtime provisions of the Contract 
Work Hours Standards Act whenever they are applicable to construction 
work. The part details the obligation of contractors and subcontractors 
relative to the weekly submission of statements regarding the wages paid 
on work covered thereby; sets forth the circumstances and procedures 
governing the making of payroll deductions from the wages of those 
employed on such work; and delineates the methods of payment permissible 
on such work.



Sec. 3.2  Definitions.

    As used in the regulations in this part:
    (a) The terms building or work generally include construction 
activity as distinguished from manufacturing, furnishing of materials, 
or servicing and maintenance work. The terms include, without 
limitation, buildings, structures, and improvements of all types, such 
as bridges, dams, plants, highways, parkways, streets, subways, tunnels, 
sewers, mains, powerlines, pumping stations, railways, airports, 
terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, 
breakwaters, levees, and canals; dredging, shoring, scaffolding, 
drilling, blasting, excavating, clearing, and landscaping. Unless 
conducted in connection with and at the site of such a building or work 
as is described in the foregoing sentence, the manufacture or furnishing 
of materials, articles, supplies, or equipment (whether or not a Federal 
or State agency acquires title to such materials, articles, supplies, or 
equipment during the course of the manufacture or furnishing, or owns 
the materials from which they are manufactured or furnished) is not a 
building or work within the meaning of the regulations in this part.

[[Page 30]]

    (b) The terms construction, prosecution, completion, or repair mean 
all types of work done on a particular building or work at the site 
thereof, including, without limitation, altering, remodeling, painting 
and decorating, the transporting of materials and supplies to or from 
the building or work by the employees of the construction contractor or 
construction subcontractor, and the manufacturing or furnishing of 
materials, articles, supplies, or equipment on the site of the building 
or work, by persons employed at the site by the contractor or 
subcontractor.
    (c) The terms public building or public work include building or 
work for whose construction, prosecution, completion, or repair, as 
defined above, a Federal agency is a contracting party, regardless of 
whether title thereof is in a Federal agency.
    (d) The term building or work financed in whole or in part by loans 
or grants from the United States includes building or work for whose 
construction, prosecution, completion, or repair, as defined above, 
payment or part payment is made directly or indirectly from funds 
provided by loans or grants by a Federal agency. The term includes 
building or work for which the Federal assistance granted is in the form 
of loan guarantees or insurance.
    (e) Every person paid by a contractor or subcontractor in any manner 
for his labor in the construction, prosecution, completion, or repair of 
a public building or public work or building or work financed in whole 
or in part by loans or grants from the United States is employed and 
receiving wages, regardless of any contractual relationship alleged to 
exist between him and the real employer.
    (f) The term any affiliated person includes a spouse, child, parent, 
or other close relative of the contractor or subcontractor; a partner or 
officer of the contractor or subcontractor; a corporation closely 
connected with the contractor or subcontractor as parent, subsidiary, or 
otherwise, and an officer or agent of such corporation.
    (g) The term Federal agency means the United States, the District of 
Columbia, and all executive departments, independent establishments, 
administrative agencies, and instrumentalities of the United States and 
of the District of Columbia, including corporations, all or 
substantially all of the stock of which is beneficially owned by the 
United States, by the District of Columbia, or any of the foregoing 
departments, establishments, agencies, and instrumentalities.

[29 FR 97, Jan. 4, 1964, as amended at 38 FR 32575, Nov. 27, 1973]



Sec. 3.3  Weekly statement with respect to payment of wages.

    (a) As used in this section, the term employee shall not apply to 
persons in classifications higher than that of laborer or mechanic and 
those who are the immediate supervisors of such employees.
    (b) Each contractor or subcontractor engaged in the construction, 
prosecution, completion, or repair of any public building or public 
work, or building or work financed in whole or in part by loans or 
grants from the United States, shall furnish each week a statement with 
respect to the wages paid each of its employees engaged on work covered 
by this part 3 and part 5 of this title during the preceding weekly 
payroll period. This statement shall be executed by the contractor or 
subcontractor or by an authorized officer or employee of the contractor 
or subcontractor who supervises the payment of wages, and shall be on 
the back of Form WH 347, ``Payroll (For Contractors Optional Use)'' or 
on any form with identical wording. Copies of WH 347 may be obtained 
from the Government contracting or sponsoring agency or from the Wage 
and Hour Division Web site at http://www.dol.gov/whd/forms/index.htm or 
its successor site.
    (c) The requirements of this section shall not apply to any contract 
of $2,000 or less.
    (d) Upon a written finding by the head of a Federal agency, the 
Secretary of Labor may provide reasonable limitations, variations, 
tolerances, and exemptions from the requirements of this section subject 
to such conditions as the Secretary of Labor may specify.

[29 FR 97, Jan. 4, 1964, as amended at 33 FR 10186, July 17, 1968; 47 FR 
23679, May 28, 1982; 73 FR 77511, Dec. 19, 2008; 82 FR 2224, Jan. 9, 
2017]

[[Page 31]]



Sec. 3.4  Submission of weekly statements and the preservation and
inspection of weekly payroll records.

    (a) Each weekly statement required under Sec. 3.3 shall be delivered 
by the contractor or subcontractor, within seven days after the regular 
payment date of the payroll period, to a representative of a Federal or 
State agency in charge at the site of the building or work, or, if there 
is no representative of a Federal or State agency at the site of the 
building or work, the statement shall be mailed by the contractor or 
subcontractor, within such time, to a Federal or State agency 
contracting for or financing the building or work. After such 
examination and check as may be made, such statement, or a copy thereof, 
shall be kept available, or shall be transmitted together with a report 
of any violation, in accordance with applicable procedures prescribed by 
the United States Department of Labor.
    (b) Each contractor or subcontractor shall preserve his weekly 
payroll records for a period of three years from date of completion of 
the contract. The payroll records shall set out accurately and 
completely the name and address of each laborer and mechanic, his 
correct classification, rate of pay, daily and weekly number of hours 
worked, deductions made, and actual wages paid. Such payroll records 
shall be made available at all times for inspection by the contracting 
officer or his authorized representative, and by authorized 
representatives of the Department of Labor.

(Reporting and recordkeeping requirements in paragraph (b) have been 
approved by the Office of Management and Budget under control number 
1235-0008)

[29 FR 97, Jan. 4, 1964, as amended at 47 FR 145, Jan. 5, 1982; 82 FR 
2224, Jan. 9, 2017]



Sec. 3.5  Payroll deductions permissible without application to
or approval of the Secretary of Labor.

    Deductions made under the circumstances or in the situations 
described in the paragraphs of this section may be made without 
application to and approval of the Secretary of Labor:
    (a) Any deduction made in compliance with the requirements of 
Federal, State, or local law, such as Federal or State withholding 
income taxes and Federal social security taxes.
    (b) Any deduction of sums previously paid to the employee as a bona 
fide prepayment of wages when such prepayment is made without discount 
or interest. A bona fide prepayment of wages is considered to have been 
made only when cash or its equivalent has been advanced to the person 
employed in such manner as to give him complete freedom of disposition 
of the advanced funds.
    (c) Any deduction of amounts required by court process to be paid to 
another, unless the deduction is in favor of the contractor, 
subcontractor, or any affiliated person, or when collusion or 
collaboration exists.
    (d) Any deduction constituting a contribution on behalf of the 
person employed to funds established by the employer or representatives 
of employees, or both, for the purpose of providing either from 
principal or income, or both, medical or hospital care, pensions or 
annuities on retirement, death benefits, compensation for injuries, 
illness, accidents, sickness, or disability, or for insurance to provide 
any of the foregoing, or unemployment benefits, vacation pay, savings 
accounts, or similar payments for the benefit of employees, their 
families and dependents: Provided, however, That the following standards 
are met:
    (1) The deduction is not otherwise prohibited by law;
    (2) It is either:
    (i) Voluntarily consented to by the employee in writing and in 
advance of the period in which the work is to be done and such consent 
is not a condition either for the obtaining of or for the continuation 
of employment, or
    (ii) provided for in a bona fide collective bargaining agreement 
between the contractor or subcontractor and representatives of its 
employees;
    (3) No profit or other benefit is otherwise obtained, directly or 
indirectly, by the contractor or subcontractor or any affiliated person 
in the form of commission, dividend, or otherwise; and
    (4) The deductions shall serve the convenience and interest of the 
employee.

[[Page 32]]

    (e) Any deduction contributing toward the purchase of United States 
Defense Stamps and Bonds when voluntarily authorized by the employee.
    (f) Any deduction requested by the employee to enable him to repay 
loans to or to purchase shares in credit unions organized and operated 
in accordance with Federal and State credit union statutes.
    (g) Any deduction voluntarily authorized by the employee for the 
making of contributions to governmental or quasi-governmental agencies, 
such as the American Red Cross.
    (h) Any deduction voluntarily authorized by the employee for the 
making of contributions to Community Chests, United Givers Funds, and 
similar charitable organizations.
    (i) Any deductions to pay regular union initiation fees and 
membership dues, not including fines or special assessments: Provided, 
however, That a collective bargaining agreement between the contractor 
or subcontractor and representatives of its employees provides for such 
deductions and the deductions are not otherwise prohibited by law.
    (j) Any deduction not more than for the ``reasonable cost'' of 
board, lodging, or other facilities meeting the requirements of section 
3(m) of the Fair Labor Standards Act of 1938, as amended, and part 531 
of this title. When such a deduction is made the additional records 
required under Sec. 516.25(a) of this title shall be kept.
    (k) Any deduction for the cost of safety equipment of nominal value 
purchased by the employee as his own property for his personal 
protection in his work, such as safety shoes, safety glasses, safety 
gloves, and hard hats, if such equipment is not required by law to be 
furnished by the employer, if such deduction is not violative of the 
Fair Labor Standards Act or prohibited by other law, if the cost on 
which the deduction is based does not exceed the actual cost to the 
employer where the equipment is purchased from him and does not include 
any direct or indirect monetary return to the employer where the 
equipment is purchased from a third person, and if the deduction is 
either
    (1) Voluntarily consented to by the employee in writing and in 
advance of the period in which the work is to be done and such consent 
is not a condition either for the obtaining of employment or its 
continuance; or
    (2) Provided for in a bona fide collective bargaining agreement 
between the contractor or subcontractor and representatives of its 
employees.

[29 FR 97, Jan. 4, 1964, as amended at 36 FR 9770, May 28, 1971]



Sec. 3.6  Payroll deductions permissible with the approval of 
the Secretary of Labor.

    Any contractor or subcontractor may apply to the Secretary of Labor 
for permission to make any deduction not permitted under Sec. 3.5. The 
Secretary may grant permission whenever he finds that:
    (a) The contractor, subcontractor, or any affiliated person does not 
make a profit or benefit directly or indirectly from the deduction 
either in the form of a commission, dividend, or otherwise;
    (b) The deduction is not otherwise prohibited by law;
    (c) The deduction is either (1) voluntarily consented to by the 
employee in writing and in advance of the period in which the work is to 
be done and such consent is not a condition either for the obtaining of 
employment or its continuance, or (2) provided for in a bona fide 
collective bargaining agreement between the contractor or subcontractor 
and representatives of its employees; and
    (d) The deduction serves the convenience and interest of the 
employee.



Sec. 3.7  Applications for the approval of the Secretary of Labor.

    Any application for the making of payroll deductions under Sec. 3.6 
shall comply with the requirements prescribed in the following 
paragraphs of this section:
    (a) The application shall be in writing and shall be addressed to 
the Secretary of Labor.
    (b) The application need not identify the contract or contracts 
under which the work in question is to be performed. Permission will be 
given for deductions on all current and future

[[Page 33]]

contracts of the applicant for a period of 1 year. A renewal of 
permission to make such payroll deduction will be granted upon the 
submission of an application which makes reference to the original 
application, recites the date of the Secretary of Labor's approval of 
such deductions, states affirmatively that there is continued compliance 
with the standards set forth in the provisions of Sec. 3.6, and 
specifies any conditions which have changed in regard to the payroll 
deductions.
    (c) The application shall state affirmatively that there is 
compliance with the standards set forth in the provisions of Sec. 3.6. 
The affirmation shall be accompanied by a full statement of the facts 
indicating such compliance.
    (d) The application shall include a description of the proposed 
deduction, the purpose to be served thereby, and the classes of laborers 
or mechanics from whose wages the proposed deduction would be made.
    (e) The application shall state the name and business of any third 
person to whom any funds obtained from the proposed deductions are to be 
transmitted and the affiliation of such person, if any, with the 
applicant.

[29 FR 97, Jan. 4, 1964, as amended at 36 FR 9771, May 28, 1971]



Sec. 3.8  Action by the Secretary of Labor upon applications.

    The Secretary of Labor shall decide whether or not the requested 
deduction is permissible under provisions of Sec. 3.6; and shall notify 
the applicant in writing of his decision.



Sec. 3.9  Prohibited payroll deductions.

    Deductions not elsewhere provided for by this part and which are not 
found to be permissible under Sec. 3.6 are prohibited.



Sec. 3.10  Methods of payment of wages.

    The payment of wages shall be by cash, negotiable instruments 
payable on demand, or the additional forms of compensation for which 
deductions are permissible under this part. No other methods of payment 
shall be recognized on work subject to the Copeland Act.



Sec. 3.11  Regulations part of contract.

    All contracts made with respect to the construction, prosecution, 
completion, or repair of any public building or public work or building 
or work financed in whole or in part by loans or grants from the United 
States covered by the regulations in this part shall expressly bind the 
contractor or subcontractor to comply with such of the regulations in 
this part as may be applicable. In this regard, see Sec. 5.5(a) of this 
subtitle.



PART 4_LABOR STANDARDS FOR FEDERAL SERVICE CONTRACTS--Table of Contents



  Subpart A_Service Contract Labor Standards Provisions and Procedures

Sec.
4.1  Purpose and scope.
4.1a  Definitions and use of terms.
4.1b  Payment of minimum compensation based on collectively bargained 
          wage rates and fringe benefits applicable to employment under 
          predecessor contract.
4.2  Payment of minimum wage specified in section 6(a)(1) of the Fair 
          Labor Standards Act of 1938 under all service contracts.
4.3  Wage determinations.
4.4  Obtaining a wage determination.
4.5  Contract specification of determined minimum wages and fringe 
          benefits.
4.6  Labor standards clauses for Federal service contracts exceeding 
          $2,500.
4.7-4.9  [Reserved]
4.10  Substantial variance proceedings under section 4(c) of the Act.
4.11  Arm's-length proceedings.
4.12  Substantial interest proceedings.

                 Subpart B_Wage Determination Procedures

4.50  Types of wage and fringe benefit determinations.
4.51  Prevailing in the locality determinations.
4.52  Fringe benefit determinations.
4.53  Collective bargaining agreement (successorship) determinations.
4.54  Locality basis of wage and fringe benefit determinations.
4.55  Issuance and revision of wage determinations.
4.56  Review and reconsideration of wage determinations.

[[Page 34]]

    Subpart C_Application of the McNamara-O'Hara Service Contract Act

                              Introductory

4.101  Official rulings and interpretations in this subpart.
4.102  Administration of the Act.
4.103  The Act.
4.104  What the Act provides, generally.
4.105  The Act as amended.
4.106  [Reserved]

                 Agencies Whose Contracts May Be Covered

4.107  Federal contracts.
4.108  District of Columbia contracts.
4.109  [Reserved]

                       Covered Contracts Generally

4.110  What contracts are covered.
4.111  Contracts ``to furnish services.''
4.112  Contracts to furnish services ``in the United States.''
4.113  Contracts to furnish services ``through the use of service 
          employees.''
4.114  Subcontracts.

                           Specific Exclusions

4.115  Exemptions and exceptions, generally.
4.116  Contracts for construction activity.
4.117  Work subject to requirements of Walsh-Healey Act.
4.118  Contracts for carriage subject to published tariff rates.
4.119  Contracts for services of communications companies.
4.120  Contracts for public utility services.
4.121  Contracts for individual services.
4.122  Contracts for operation of postal contract stations.
4.123  Administrative limitations, variations, tolerances, and 
          exemptions.
4.124-4.129  [Reserved]

         Particular Application of Contract Coverage Principles

4.130  Types of covered service contracts illustrated.
4.131  Furnishing services involving more than use of labor.
4.132  Services and other items to be furnished under a single contract.
4.133  Beneficiary of contract services.
4.134  Contracts outside the Act's coverage.
4.135-4.139  [Reserved]

                     Determining Amount of Contract

4.140  Significance of contract amount.
4.141  General criteria for measuring amount.
4.142  Contracts in an indefinite amount.

                      Changes in Contract Coverage

4.143  Effects of changes or extensions of contracts, generally.
4.144  Contract modifications affecting amount.
4.145  Extended term contracts.

                           Period of Coverage

4.146  Contract obligations after award, generally.
4.147-4.149  [Reserved]

                      Employees Covered by the Act

4.150  Employee coverage, generally.
4.151  Employees covered by provisions of section 2(a).
4.152  Employees subject to prevailing compensation provisions of 
          sections 2(a) (1) and (2) and 4(c).
4.153  Inapplicability of prevailing compensation provisions to some 
          employees.
4.154  Employees covered by sections 2(a) (3) and (4).
4.155  Employee coverage does not depend on form of employment contract.
4.156  Employees in bona fide executive, administrative, or professional 
          capacity.
4.157-4.158  [Reserved]

                    Subpart D_Compensation Standards

4.159  General minimum wage.
4.160  Effect of section 6(e) of the Fair Labor Standards Act.
4.161  Minimum monetary wages under contracts exceeding $2,500.
4.162  Fringe benefits under contracts exceeding $2,500.
4.163  Section 4(c) of the Act.
4.164  [Reserved]

                 Compliance With Compensation Standards

4.165  Wage payments and fringe benefits--in general.
4.166  Wage payments--unit of payment.
4.167  Wage payments--medium of payment.
4.168  Wage payments--deductions from wages paid.
4.169  Wage payments--work subject to different rates.
4.170  Furnishing fringe benefits or equivalents.
4.171  ``Bona fide'' fringe benefits.
4.172  Meeting requirements for particular fringe benefits--in general.
4.173  Meeting requirements for vacation fringe benefits.
4.174  Meeting requirements for holiday fringe benefits.
4.175  Meeting requirements for health, welfare, and/or pension 
          benefits.
4.176  Payment of fringe benefits to temporary and part-time employees.
4.177  Discharging fringe benefit obligations by equivalent means.
4.178  Computation of hours worked.
4.179  Identification of contract work.

[[Page 35]]

                    Overtime Pay of Covered Employees

4.180  Overtime pay--in general.
4.181  Overtime pay provisions of other Acts.
4.182  Overtime pay of service employees entitled to fringe benefits.

                           Notice to Employees

4.183  Employees must be notified of compensation required.
4.184  Posting of notice.

                                 Records

4.185  Recordkeeping requirements.
4.186  [Reserved]

                          Subpart E_Enforcement

4.187  Recovery of underpayments.
4.188  Ineligibility for further contracts when violations occur.
4.189  Administrative proceedings relating to enforcement of labor 
          standards.
4.190  Contract cancellation.
4.191  Complaints and compliance assistance.

    Authority: 41 U.S.C. 351 et seq.; 41 U.S.C. 38 and 39; 5 U.S.C. 301; 
Pub. L. 104-188, 2105(b); Pub. L. 110-28, 121 Stat. 112; Secretary's 
Order 01-2014 (Dec. 19, 2014), 79 FR 77527 (Dec. 24, 2014).

    Source: 48 FR 49762, Oct. 27, 1983, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 4 appear at 61 FR 
19984, May 3, 1996.



  Subpart A_Service Contract Labor Standards Provisions and Procedures



Sec. 4.1  Purpose and scope.

    This part contains the Department of Labor's rules relating to the 
administration of the McNamara-O'Hara Service Contract Act of 1965, as 
amended, referred to hereinafter as the Act. Rules of practice for 
administrative proceedings under the Act and for the review of wage 
determinations are contained in parts 6 and 8 of this chapter. See part 
1925 of this title for the safety and health standards applicable under 
the Service Contract Act.



Sec. 4.1a  Definitions and use of terms.

    As used in this part, unless otherwise indicated by the context--
    (a) Act, Service Contract Act, McNamara-O'Hara Act, or Service 
Contract Act of 1965 shall mean the Service Contract Act of 1965 as 
amended by Public Law 92-473, 86 Stat. 789, effective October 9, 1972, 
Public Law 93-57, 87 Stat. 140, effective July 6, 1973, and Public Law 
94-489, 90 Stat. 2358, effective October 13, 1976 and any subsequent 
amendments thereto.
    (b) Secretary includes the Secretary of Labor or their authorized 
representative.
    (c) Wage and Hour Division means the organizational unit of the 
Department of Labor to which is assigned the performance of functions of 
the Secretary under the Service Contract Act of 1965, as amended.
    (d) Administrator means the Administrator of the Wage and Hour 
Division, or authorized representative.
    (e) Contract includes any contract subject wholly or in part to the 
provisions of the Service Contract Act of 1965 as amended, and any 
subcontract of any tier thereunder. (See Secs. 4.10-4.134.)
    (f) Contractor includes a subcontractor whose subcontract is subject 
to provisions of the Act. Also, the term employer means, and is used 
interchangeably with, the terms contractor and subcontractor in various 
sections in this part. The U.S. Government, its agencies, and 
instrumentalities are not contractors, subcontractors, employers or 
joint employers for purposes of compliance with the provisions of the 
Act.
    (g) Affiliate or affiliated person includes a spouse, child, parent, 
or other close relative of the contractor or subcontractor; a partner or 
officer of the contractor or subcontractor; a corporation closely 
connected with a contractor or subcontractor as a parent, subsidiary, or 
otherwise; and an officer or agent of such corporation. An affiliation 
is also deemed to exist where, directly or indirectly, one business 
concern or individual controls or has the power to control the other or 
where a third party controls or has the power to control both.
    (h) Wage determination includes any determination of minimum wage 
rates or fringe benefits made pursuant to the provisions of sections 
2(a) and/or 4(c) of the Act for application to the employment in a 
locality of any class or classes of service employees in the performance 
of any contract in excess of $2,500 which is subject to the provisions 
of

[[Page 36]]

the Service Contract Act of 1965. A wage determination is effective upon 
its publication on the WDOL Web site or when a Federal agency receives a 
response from the Department of Labor to an e98.
    (i) Wage Determinations OnLine (WDOL) means the Government Internet 
Web site for both Davis-Bacon Act and Service Contract Act wage 
determinations available at http://www.wdol.gov. In addition, WDOL 
provides compliance assistance information and a link to submit an e98 
or any electronic means the Department of Labor may approve for this 
purpose. The term will also apply to any other Internet Web site or 
electronic means that the Department of Labor may approve for these 
purposes.
    (j) The e98 means a Department of Labor approved electronic 
application (http://www.wdol.gov), whereby a contracting officer submits 
pertinent information to the Department of Labor and requests a wage 
determination directly from the Wage and Hour Division. The term will 
also apply to any other process or system the Department of Labor may 
establish for this purpose.

[48 FR 49762, Oct. 27, 1983, as amended at 70 FR 50895, Aug. 26, 2005; 
81 FR 2224, Jan. 9, 2017]



Sec. 4.1b  Payment of minimum compensation based on collectively
bargained wage rates and fringe benefits applicable to employment
under predecessor contract.

    (a) Section 4(c) of the Service Contract Act of 1965 as amended 
provides special minimum wage and fringe benefit requirements applicable 
to every contractor and subcontractor under a contract which succeeds a 
contract subject to the Act and under which substantially the same 
services as under the predecessor contract are furnished in the same 
locality. Section 4(c) provides that no such contractor or subcontractor 
shall pay any service employee employed on the contract work less than 
the wages and fringe benefits provided for in a collective bargaining 
agreement as a result of arms-length negotiations, to which such service 
employees would have been entitled if they were employed under the 
predecessor contract, including accrued wages and fringe benefits and 
any prospective increases in wages and fringe benefits provided for in 
such collective bargaining agreement. If, however, the Secretary finds 
after a hearing in accordance with the regulations set forth in 
Sec. 4.10 of this subpart and parts 6 and 8 of this title that in any of 
the foregoing circumstances such wages and fringe benefits are 
substantially at variance with those which prevail for service of a 
character similar in the locality, those wages and/or fringe benefits in 
such collective bargaining agreement which are found to be substantially 
at variance shall not apply, and a new wage determination shall be 
issued. If the contract has been awarded and work begun prior to a 
finding that the wages and/or fringe benefits in a collective bargaining 
agreement are substantially at variance with those prevailing in the 
locality, the payment obligation of such contractor or subcontractor 
with respect to the wages and fringe benefits contained in the new wage 
determination shall be applicable as of the date of the Administrative 
Law Judge's decision or, where the decision is reviewed by the 
Administrative Review Board, the date of the decision of the 
Administrative Review Board. (See also Sec. 4.163(c).)
    (b) Pursuant to section 4(b) of the Act, the application of section 
4(c) is made subject to the following variation in the circumstances and 
under the conditions described: The wage rates and fringe benefits 
provided for in any collective bargaining agreement applicable to the 
performance of work under the predecessor contract which is consummated 
during the period of performance of such contract shall not be effective 
for purposes of the successor contract under the provisions of section 
4(c) of the Act or under any wage determination implementing such 
section issued pursuant to section 2(a) of the Act, if--
    (1) In the case of a successor contract for which bids have been 
invited by formal advertising, notice of the terms of such new or 
changed collective bargaining agreement is received by the contracting 
agency less than 10 days before the date set for opening of bids,

[[Page 37]]

provided that the contracting agency finds that there is not reasonable 
time still available to notify bidders; or
    (2) Notice of the terms of a new or changed collective bargaining 
agreement is received by the agency after award of a successor contract 
to be entered into pursuant to negotiations or as a result of the 
execution of a renewal option or an extension of the initial contract 
term, provided that the contract start of performance is within 30 days 
of such award or renewal option or extension. If the contract does not 
specify a start of performance date which is within 30 days from the 
award, and/or performance of such procurement does not commence within 
this 30-day period, any notice of the terms of a new or changed 
collective bargaining agreement received by the agency not less than 10 
days before commencement of the contract will be effective for purposes 
of the successor contract under section 4(c); and
    (3) The limitations in paragraph (b)(1) or (2) of this section shall 
apply only if the contracting officer has given both the incumbent 
(predecessor) contractor and his employees' collective bargaining 
representative written notification at least 30 days in advance of all 
applicable estimated procurement dates, including issue of bid 
solicitation, bid opening, date of award, commencement of negotiations, 
receipt of proposals, or the commencement date of a contract resulting 
from a negotiation, option, or extension, as the case may be.



Sec. 4.2  Payment of minimum wage specified in section 6(a)(1) of the
Fair Labor Standards Act of 1938 under all service contracts.

    Section 2(b)(1) of the Service Contract Act of 1965 provides in 
effect that, regardless of contract amount, no contractor or 
subcontractor performing work under any Federal contract the principal 
purpose of which is to furnish services through the use of service 
employees shall pay any employees engaged in such work less than the 
minimum wage specified in section 6(a)(1) of the Fair Labor Standards 
Act of 1938, as amended.

[61 FR 68663, Dec. 30, 1996]



Sec. 4.3  Wage determinations.

    (a) The minimum monetary wages and fringe benefits for service 
employees which the Act requires to be specified in contracts and bid 
solicitations subject to section 2(a) thereof will be set forth in wage 
determinations issued by the Administrator. Wage determinations shall be 
issued as soon as administratively feasible for all contracts subject to 
section 2(a) of the Act, and will be issued for all contracts entered 
into under which more than 5 service employees are to be employed.
    (b) As described in subpart B of this part--Wage Determination 
Procedures, two types of wage determinations are issued under the Act: 
Prevailing in the locality or Collective Bargaining Agreement 
(Successorship) wage determinations. The facts related to a specific 
solicitation and contract will determine the type of wage determination 
applicable to that procurement. In addition, different types of 
prevailing wage determinations may be issued depending upon the nature 
of the contract. While prevailing wage determinations based upon cross-
industry survey data are applicable to most contracts covered by the 
Act, in some cases the Department of Labor may issue industry specific 
wage determinations for application to specific types of service 
contracts. In addition, the geographic scope of contracts is often 
different and the geographic scope of the underlying survey data for the 
wage determinations applicable to those contracts may be different.
    (c) Such wage determinations will set forth for the various classes 
of service employees to be employed in furnishing services under such 
contracts in the appropriate localities, minimum monetary wage rates to 
be paid and minimum fringe benefits to be furnished them during the 
periods when they are engaged in the performance of such contracts, 
including, where appropriate under the Act, provisions for adjustments 
in such minimum rates and benefits to be placed in effect under such 
contracts at specified future times. The wage rates and fringe benefits 
set forth in such wage determinations shall be determined in accordance 
with the provisions of sections 2(a)(1), (2), and (5), 4(c) and 4(d) of 
the

[[Page 38]]

Act from those prevailing in the locality for such employees, with due 
consideration of the rates that would be paid for direct Federal 
employment of any classes of such employees whose wages, if Federally 
employed, would be determined as provided in 5 U.S.C. 5341 or 5 U.S.C. 
5332, or from pertinent collective bargaining agreements with respect to 
the implementation of section 4(c). The wage rates and fringe benefits 
so determined for any class of service employees to be engaged in 
furnishing covered contract services in a locality shall be made 
applicable by contract to all service employees of such class employed 
to perform such services in the locality under any contract subject to 
section 2(a) of the Act which is entered into thereafter and before such 
determination has been rendered obsolete by a withdrawal, modification, 
revision, or supersedure.
    (d) Generally, wage determinations issued for solicitations or 
negotiations for any contract where the place of performance is unknown 
will contain minimum monetary wages and fringe benefits for the various 
geographic localities where the work may be performed which were 
identified in the initial solicitation. (See Sec. 4.4(a)(3)(i).)
    (e) Wage determinations will be available for public inspection 
during business hours at the Wage and Hour Division, U.S. Department of 
Labor, Washington, DC, and copies will be made available upon request at 
Regional Offices of the Wage and Hour Division. In addition, most 
prevailing wage determinations are available online from WDOL. Archived 
versions of SCA wage determinations that are no longer current may be 
accessed in the ``Archived SCA WD'' database of WDOL for information 
purposes only. Contracting officers should not use an archived wage 
determination in a contract action without prior approval of the 
Department of Labor.

[48 FR 49762, Oct. 27, 1983, as amended at 70 FR 50895, Aug. 26, 2005; 
82 FR 2224, Jan. 9, 2017]



Sec. 4.4  Obtaining a wage determination.

    (a)(1) Sections 2(a)(1) and (2) of the Act require that every 
contract and any bid specification therefore in excess of $2,500 contain 
a wage determination specifying the minimum monetary wages and fringe 
benefits to be paid to service employees performing work on the 
contract. The contracting agency, therefore, must obtain a wage 
determination prior to:
    (i) Any invitation for bids;
    (ii) Request for proposals;
    (iii) Commencement of negotiations;
    (iv) Exercise of option or contract extension;
    (v) Annual anniversary date of a multi-year contract subject to 
annual fiscal appropriations of the Congress; or
    (vi) Each biennial anniversary date of a multi-year contract not 
subject to such annual appropriations, if so authorized by the Wage and 
Hour Division.
    (2) As described in Sec. 4.4(b), wage determinations may be obtained 
from the Department of Labor by electronically submitting an e98 
describing the proposed contract and the occupations expected to be 
employed on the contract. Based upon the information provided on the 
e98, the Department of Labor will respond with the wage determination or 
wage determinations that the contracting agency may rely upon as the 
correct wage determination(s) for the contract described in the e98. 
Alternatively, contracting agencies may select and obtain a wage 
determination using WDOL. (See Sec. 4.4(c).) Although the WDOL Web site 
provides assistance to the agency to select the correct wage 
determination for the contract, the agency remains responsible for the 
wage determination selected.
    (3)(i) Where the place of performance of a contract for services 
subject to the Act is unknown at the time of solicitation, the 
solicitation need not initially contain a wage determination. The 
contracting agency, upon identification of firms participating in the 
procurement in response to an initial solicitation, shall obtain a wage 
determination for each location where the work may be performed as 
indicated by participating firms. An applicable wage determination must 
be obtained for each firm participating in the bidding for the location 
in which it would perform the contract. The appropriate

[[Page 39]]

wage determination shall be incorporated in the resultant contract 
documents and shall be applicable to all work performed thereunder 
(regardless of whether the successful contractor subsequently changes 
the place(s) of contract performance).
    (ii) There may be unusual situations, as determined by the 
Department of Labor upon consultation with a contracting agency, where 
the procedure in paragraph (a)(3)(i) of this section is not practicable 
in a particular situation. In these situations, the Department may 
authorize a modified procedure that may result in the subsequent 
issuance of wage determinations for one or more composite localities.
    (4) In no event may a contract subject to the Act on which more than 
five (5) service employees are contemplated to be employed be awarded 
without an appropriate wage determination. (See section 10 of the Act.)
    (b) e98 process--
    (1) The e98 is an electronic application used by contracting 
agencies to request wage determinations directly from the Wage and Hour 
Division. The Division uses computers to analyze information provided on 
the e98 and to provide a response while the requester is online, if the 
analysis determines that an existing wage determination is currently 
applicable to the procurement. The response will assign a unique serial 
number to the e98 and the response will provide a link to an electronic 
copy of the applicable wage determination(s). If the initial computer 
analysis cannot identify the applicable wage determination for the 
request, an online response will be provided indicating that the request 
has been referred to an analyst. Again, the online response will assign 
a unique serial number to the e98. After an analyst has reviewed the 
request, a further response will be sent to the email address identified 
on the e98. In most cases, the further response will provide an 
attachment with a copy of the applicable wage determination(s). In some 
cases, however, additional information may be required and the 
additional information will be requested via email. After an applicable 
wage determination is sent in response to an e98, the e98 system 
continues to monitor the request and if the applicable wage 
determination is revised in time to affect the procurement, an amended 
response will be sent to the email address identified on the e98.
    (2) When completing an e98, it is important that all information 
requested be completed accurately and fully. However, several sections 
are particularly important. Since most responses are provided via email, 
a correct email address is critically important. Accurate procurement 
dates are essential for the follow-up response system to operate 
effectively. An accurate estimate of the number of service employees to 
be employed under the contract is also important because section 10 of 
the Act requires that a wage determination be issued for all contracts 
that involve more than five service employees.
    (3) Since the e98 system automatically provides an amended response 
if the applicable wage determination is revised, the email address 
listed on the e98 must be monitored during the full solicitation stage 
of the procurement. Communications sent to the email address provided 
are deemed to be received by the contracting agency. A contracting 
agency must update the email address through the ``help'' process 
identified on the e98, if the agency no longer intends to monitor the 
email address.
    (4) For invitations to bid, if the bid opening date is delayed by 
more than sixty (60) days, or if contract commencement is delayed by 
more than sixty (60) days for all other contract actions, the 
contracting agency shall submit a revised e98.
    (5) If the services to be furnished under the proposed contract will 
be substantially the same as services being furnished in the same 
locality by an incumbent contractor whose contract the proposed contract 
will succeed, and if such incumbent contractor is furnishing such 
services through the use of service employees whose wage rates and 
fringe benefits are the subject of one or more collective bargaining 
agreements, the contracting agency shall reference the union and the 
collective bargaining agreement on the e98. The requester will receive 
an e-mail response giving instructions for

[[Page 40]]

submitting a copy of each such collective bargaining agreement together 
with any related documents specifying the wage rates and fringe benefits 
currently or prospectively payable under such agreement. After receipt 
of the collective bargaining agreement, the Wage and Hour Division will 
provide a further e-mail response attaching a copy of the wage 
determination based upon the collective bargaining agreement. If the 
place of contract performance is unknown, the contracting agency will 
submit the collective bargaining agreement of the incumbent contractor 
for incorporation into a wage determination applicable to a potential 
bidder located in the same locality as the predecessor contractor. If 
such services are being furnished at more than one locality and the 
collectively bargained wage rates and fringe benefits are different at 
different localities or do not apply to one or more localities, the 
agency shall identify the localities to which such agreements have 
application. If the collective bargaining agreement does not apply to 
all service employees under the contract, the agency shall identify the 
employees and/or work subject to the collective bargaining agreement. In 
the event the agency has reason to believe that any such collective 
bargaining agreement was not entered into as a result of arm's-length 
negotiations, a full statement of the facts so indicating shall be 
transmitted with the copy of such agreement. (See Sec. 4.11.) If the 
agency has information indicating that any such collectively bargained 
wage rates and fringe benefits are substantially at variance with those 
prevailing for services of a similar character in the locality, the 
agency shall so advise the Wage and Hour Division and, if it believes a 
hearing thereon pursuant to section 4(c) of the Act is warranted, shall 
file its request for such hearing pursuant to Sec. 4.10 at the time of 
filing the e98.
    (6) If the proposed contract is for a multi-year period subject to 
other than annual appropriations, the contracting agency shall provide a 
statement in the comments section of the e98 concerning the type of 
funding and the contemplated term of the proposed contract. Unless 
otherwise advised by the Wage and Hour Division that a wage 
determination must be obtained on the annual anniversary date, a new 
wage determination shall be obtained on each biennial anniversary date 
of the proposed multi-year contract in the event its term is for a 
period in excess of two years.
    (c) WDOL process--
    (1) Contracting agencies may use the WDOL Web site to select the 
applicable prevailing wage determination for the procurement. The WDOL 
site provides assistance to the agency in the selection of the correct 
wage determination. The contracting agency, however, is fully 
responsible for selecting the correct wage determination. If the 
Department of Labor subsequently determines that an incorrect wage 
determination was applied to a specific contract, the contracting 
agency, in accordance with Sec. 4.5, shall amend the contract to 
incorporate the correct wage determination as determined by the 
Department of Labor.
    (2) If an applicable prevailing wage determination is not available 
on the WDOL site, the contracting agency must submit an e98 in 
accordance with Sec. 4.4(b).
    (3) The contracting agency shall monitor the WDOL site to determine 
whether the applicable wage determination has been revised. Revisions 
published on the WDOL site or otherwise communicated to the contracting 
officer within the timeframes prescribed in Sec. 4.5(a)(2) are 
applicable and must be included in the resulting contract.
    (4) If the services to be furnished under the proposed contract will 
be substantially the same as services being furnished in the same 
locality by an incumbent contractor whose contract the proposed contract 
will succeed, and if such incumbent contractor is furnishing such 
services through the use of service employees whose wage rates and 
fringe benefits are the subject of one or more collective bargaining 
agreements, the contracting agency may prepare a wage determination that 
references the collective bargaining agreement by incorporating that 
wage determination, with a complete copy of the collective bargaining 
agreement attached thereto, into the

[[Page 41]]

successor contract action. It need not submit a copy of the collective 
bargaining agreement to the Department of Labor unless requested to do 
so. If the place of contract performance is unknown, the contracting 
agency will prepare a wage determination on WDOL and attach the 
collective bargaining agreement of the incumbent contractor and make 
both the wage determination and collective bargaining agreement 
applicable to a potential bidder located in the same locality as the 
predecessor contractor. (See section 4.4(a)(3).) If such services are 
being furnished at more than one locality and the collectively bargained 
wage rates and fringe benefits are different at different localities or 
do not apply to one or more localities, the agency shall identify the 
localities to which such agreements have application. If the collective 
bargaining agreement does not apply to all service employees under the 
contract, the agency shall identify the employees and/or work subject to 
the collective bargaining agreement. In the event the agency has reason 
to believe that any such collective bargaining agreement was not entered 
into as a result of arm's-length negotiations, a full statement of the 
facts so indicating shall be transmitted to the Wage and Hour Division 
with the copy of such agreement. (See Sec. 4.11.) If the agency has 
information indicating that any such collectively bargained wage rates 
and fringe benefits are substantially at variance with those prevailing 
for services of a similar character in the locality, the agency shall so 
advise the Wage and Hour Division and, if it believes a hearing thereon 
pursuant to section 4(c) of the Act is warranted, shall file its request 
for such hearing pursuant to Sec. 4.10. A wage determination based upon 
the collective bargaining agreement must be included in the contract 
until a hearing or a final ruling of the Administrator determines that 
the collective bargaining agreement was not reached as the result of 
arm's-length negotiations or was substantially at variance with locally 
prevailing rates. Any questions regarding timeliness or applicability of 
collective bargaining agreements must be referred to the Department of 
Labor for resolution.
    (5) If the proposed contract is for a multi-year period subject to 
other than annual appropriations, the contracting agency shall, unless 
otherwise advised by the Wage and Hour Division, obtain a new wage 
determination on each biennial anniversary date of the proposed multi-
year contract in the event its term is for a period in excess of two 
years.

[70 FR 50896, Aug. 26, 2005]



Sec. 4.5  Contract specification of determined minimum wages and
fringe benefits.

    (a) Any contract in excess of $2,500 shall contain, as an 
attachment, the applicable, currently effective wage determination 
specifying the minimum wages and fringe benefits for service employees 
to be employed thereunder, including any information referred to in 
paragraphs (a)(1) or (2) of this section;
    (1) Any wage determination from the Wage and Hour Division, 
Department of Labor, responsive to the contracting agency's submission 
of an e98 or obtained through WDOL under Sec. 4.4; or
    (2) Any revision of a wage determination issued prior to the award 
of the contract or contracts which specifies minimum wage rates or 
fringe benefits for classes of service employees whose wages or fringe 
benefits were not previously covered by wage determinations, or which 
changes previously determined minimum wage rates and fringe benefits for 
service employees employed on covered contracts in the locality.
    (i) However, revisions received by the Federal agency later than 10 
days before the opening of bids, in the case of contracts entered into 
pursuant to competitive bidding procedures, shall not be effective if 
the Federal agency finds that there is not a reasonable time still 
available to notify bidders of the revision.
    (ii) In the case of procurements entered into pursuant to 
negotiations (or in the case of the execution of an option or an 
extension of the initial contract term), revisions received by the 
agency after award (or execution of an option or extension of term, as 
the case may be) of the contract shall not be effective provided that 
the contract start

[[Page 42]]

of performance is within 30 days of such award (or execution of an 
option or extension of term). Any notice of a revision received by the 
agency not less than 10 days before commencement of the contract shall 
be effective, if:
    (A) The contract does not specify a start of performance date which 
is within 30 days from the award; and/or
    (B) Performance of such procurement does not commence within this 
30-day period.
    (iii) In situations arising under section 4(c) of the Act, the 
provisions in Sec. 4.1b(b) apply.
    (3) For purposes of using WDOL databases containing prevailing wage 
determinations, the date of receipt by the contracting agency will be 
the date of publication on the WDOL Web site or on the date the agency 
receives actual notice of an initial or revised wage determination from 
the Department of Labor through the e98 process, whichever occurs first.
    (b)(1) The following exemption from the compensation requirements of 
section 2(a) of the Act applies, subject to the limitations set forth in 
paragraphs (b)(2), (3), and (4) of this section: To avoid serious 
impairment of the conduct of Government business it has been found 
necessary and proper to provide exemption from the determined wage and 
fringe benefits section of the Act (section 2(a)(1), (2)) but not the 
minimum wage specified under section 6(a)(1) of the Fair Labor Standards 
Act of 1938, as amended (section 2(b) of this Act), of contracts under 
which five or less service employees are to be employed, and for which 
no such wage or fringe benefit determination has been issued;
    (2) The exemption provided in paragraph (b)(1) of this section, 
which was adopted pursuant to section 4(b) of the Act prior to its 
amendment by Public Law 92-473, does not extend to undetermined wages or 
fringe benefits in contracts for which one or more, but not all, classes 
of service employees are the subject of an applicable wage 
determination. The procedure for determination of wage rates and fringe 
benefits for any classes of service employees engaged in performing such 
contracts whose wages and fringe benefits are not specified in the 
applicable wage determination is set forth in Sec. 4.6(b).
    (3) The exemption provided in paragraph (b)(1) of this section does 
not exempt any contract from the application of the provisions of 
section 4(c) of the Act as amended, concerning successor contracts.
    (4) The exemption provided in paragraph (b)(1) of this section does 
not apply to any contract for which section 10 of the Act as amended 
requires an applicable wage determination.
    (c) Where the Department of Labor discovers and determines, whether 
before or subsequent to a contract award, that a contracting agency made 
an erroneous determination that the Service Contract Act did not apply 
to a particular procurement and/or failed to include an appropriate wage 
determination in a covered contract, the contracting agency, within 30 
days of notification by the Department of Labor, shall include in the 
contract the stipulations contained in Sec. 4.6 and any applicable wage 
determination issued by the Administrator or his authorized 
representative through the exercise of any and all authority that may be 
needed (including, where necessary, its authority to negotiate or amend, 
its authority to pay any necessary additional costs, and its authority 
under any contract provision authorizing changes, cancellation, and 
termination). With respect to any contract subject to section 10 of the 
Act, the Administrator may require retroactive application of such wage 
determination. (See 53 Comp. Gen. 412, (1973); Curtiss-Wright Corp. v. 
McLucas, 381 F. Supp. 657 (D NJ 1974); Marine Engineers Beneficial 
Assn., District 2 v. Military Sealift Command, 86 CCH Labor Cases  
33,782 (D DC 1979); Brinks, Inc. v. Board of Governors of the Federal 
Reserve System, 466 F. Supp. 112 (D DC 1979), 466 F. Supp. 116 (D DC 
1979).) (See also 32 CFR 1-403.)
    (d) In cases where the contracting agency has filed an e98 and has 
not received a response from the Department of Labor, the contracting 
agency shall, with respect to any contract for which section 10 to the 
Act and Sec. 4.3 for this part mandate the inclusion of an applicable 
wage determination, contact the

[[Page 43]]

Wage and Hour Division by e-mail or telephone for guidance.

[48 FR 49762, Oct. 27, 1983, as amended at 70 FR 50897, Aug. 26, 2005; 
82 FR 2224, Jan. 9, 2017]



Sec. 4.6  Labor standards clauses for Federal service contracts
exceeding $2,500.

    The clauses set forth in the following paragraphs shall be included 
in full by the contracting agency in every contract entered into by the 
United States or the District of Columbia, in excess of $2,500, or in an 
indefinite amount, the principal purpose of which is to furnish services 
through the use of service employees:
    (a) Service Contract Act of 1965, as amended: This contract is 
subject to the Service Contract Act of 1965, as amended (41 U.S.C. 351 
et seq.) and is subject to the following provisions and to all other 
applicable provisions of the Act and regulations of the Secretary of 
Labor issued thereunder (29 CFR part 4).
    (b)(1) Each service employee employed in the performance of this 
contract by the contractor or any subcontractor shall be paid not less 
than the minimum monetary wages and shall be furnished fringe benefits 
in accordance with the wages and fringe benefits determined by the 
Secretary of Labor or authorized representative, as specified in any 
wage determination attached to this contract.
    (2)(i) If there is such a wage determination attached to this 
contract, the contracting officer shall require that any class of 
service employee which is not listed therein and which is to be employed 
under the contract (i.e., the work to be performed is not performed by 
any classification listed in the wage determination), be classified by 
the contractor so as to provide a reasonable relationship (i.e., 
appropriate level of skill comparison) between such unlisted 
classifications and the classifications listed in the wage 
determination. Such conformed class of employees shall be paid the 
monetary wages and furnished the fringe benefits as are determined 
pursuant to the procedures in this section.
    (ii) Such conforming procedure shall be initiated by the contractor 
prior to the performance of contract work by such unlisted class of 
employee. A written report of the proposed conforming action, including 
information regarding the agreement or disagreement of the authorized 
representative of the employees involved or, where there is no 
authorized representative, the employees themselves, shall be submitted 
by the contractor to the contracting officer no later than 30 days after 
such unlisted class of employees performs any contract work. The 
contracting officer shall review the proposed action and promptly submit 
a report of the action, together with the agency's recommendation and 
all pertinent information including the position of the contractor and 
the employees, to the Wage and Hour Division, U.S. Department of Labor, 
for review. The Wage and Hour Division will approve, modify, or 
disapprove the action or render a final determination in the event of 
disagreement within 30 days of receipt or will notify the contracting 
officer within 30 days of receipt that additional time is necessary.
    (iii) The final determination of the conformance action by the Wage 
and Hour Division shall be transmitted to the contracting officer who 
shall promptly notify the contractor of the action taken. Each affected 
employee shall be furnished by the contractor with a written copy of 
such determination or it shall be posted as a part of the wage 
determination.
    (iv)(A) The process of establishing wage and fringe benefit rates 
that bear a reasonable relationship to those listed in a wage 
determination cannot be reduced to any single formula. The approach used 
may vary from wage determination to wage determination depending on the 
circumstances. Standard wage and salary administration practices which 
rank various job classifications by pay grade pursuant to point schemes 
or other job factors may, for example, be relied upon. Guidance may also 
be obtained from the way different jobs are rated under Federal pay 
systems (Federal Wage Board Pay System and the General Schedule) or from 
other wage determinations issued in the same locality. Basic to the 
establishment of any conformable wage rate(s) is the concept that a pay

[[Page 44]]

relationship should be maintained between job classifications based on 
the skill required and the duties performed.
    (B) In the case of a contract modification, an exercise of an option 
or extension of an existing contract, or in any other case where a 
contractor succeeds a contract under which the classification in 
question was previously conformed pursuant to this section, a new 
conformed wage rate and fringe benefits may be assigned to such 
conformed classification by indexing (i.e., adjusting) the previous 
conformed rate and fringe benefits by an amount equal to the average 
(mean) percentage increase (or decrease, where appropriate) between the 
wages and fringe benefits specified for all classifications to be used 
on the contract which are listed in the current wage determination, and 
those specified for the corresponding classifications in the previously 
applicable wage determination. Where conforming actions are accomplished 
in accordance with this paragraph prior to the performance of contract 
work by the unlisted class of employees, the contractor shall advise the 
contracting officer of the action taken but the other procedures in 
paragraph (b)(2)(ii) of this section need not be followed.
    (C) No employee engaged in performing work on this contract shall in 
any event be paid less than the currently applicable minimum wage 
specified under section 6(a)(1) of the Fair Labor Standards Act of 1938, 
as amended.
    (v) The wage rate and fringe benefits finally determined pursuant to 
paragraphs (b)(2)(i) and (ii) of this section shall be paid to all 
employees performing in the classification from the first day on which 
contract work is performed by them in the classification. Failure to pay 
such unlisted employees the compensation agreed upon by the interested 
parties and/or finally determined by the Wage and Hour Division 
retroactive to the date such class of employees commenced contract work 
shall be a violation of the Act and this contract.
    (vi) Upon discovery of failure to comply with paragraphs (b)(2)(i) 
through (v) of this section, the Wage and Hour Division shall make a 
final determination of conformed classification, wage rate, and/or 
fringe benefits which shall be retroactive to the date such class of 
employees commenced contract work.
    (3) If, as authorized pursuant to section 4(d) of the Service 
Contract Act of 1965 as amended, the term of this contract is more than 
1 year, the minimum monetary wages and fringe benefits required to be 
paid or furnished thereunder to service employees shall be subject to 
adjustment after 1 year and not less often than once every 2 years, 
pursuant to wage determinations to be issued by the Wage and Hour 
Division of the Department of Labor as provided in such Act.
    (c) The contractor or subcontractor may discharge the obligation to 
furnish fringe benefits specified in the attachment or determined 
conformably thereto by furnishing any equivalent combinations of bona 
fide fringe benefits, or by making equivalent or differential payments 
in cash in accordance with the applicable rules set forth in subpart D 
of 29 CFR part 4, and not otherwise.
    (d)(1) In the absence of a minimum wage attachment for this 
contract, neither the contractor nor any subcontractor under this 
contract shall pay any person performing work under the contract 
(regardless of whether they are service employees) less than the minimum 
wage specified by section 6(a)(1) of the Fair Labor Standards Act of 
1938. Nothing in this provision shall relieve the contractor or any 
subcontractor of any other obligation under law or contract for the 
payment of a higher wage to any employee.
    (2) If this contract succeeds a contract, subject to the Service 
Contract Act of 1965 as amended, under which substantially the same 
services were furnished in the same locality and service employees were 
paid wages and fringe benefits provided for in a collective bargaining 
agreement, in the absence of the minimum wage attachment for this 
contract setting forth such collectively bargained wage rates and fringe 
benefits, neither the contractor nor any subcontractor under this 
contract shall pay any service employee performing any of the contract 
work (regardless of whether or not such employee was employed under the

[[Page 45]]

predecessor contract), less than the wages and fringe benefits provided 
for in such collective bargaining agreements, to which such employee 
would have been entitled if employed under the predecessor contract, 
including accrued wages and fringe benefits and any prospective 
increases in wages and fringe benefits provided for under such 
agreement. No contractor or subcontractor under this contract may be 
relieved of the foregoing obligation unless the limitations of 
Sec. 4.1b(b) of 29 CFR part 4 apply or unless the Secretary of Labor or 
his authorized representative finds, after a hearing as provided in 
Sec. 4.10 of 29 CFR part 4 that the wages and/or fringe benefits 
provided for in such agreement are substantially at variance with those 
which prevail for services of a character similar in the locality, or 
determines, as provided in Sec. 4.11 of 29 CFR part 4, that the 
collective bargaining agreement applicable to service employees employed 
under the predecessor contract was not entered into as a result of 
arm's-length negotiations. Where it is found in accordance with the 
review procedures provided in 29 CFR 4.10 and/or 4.11 and parts 6 and 8 
that some or all of the wages and/or fringe benefits contained in a 
predecessor contractor's collective bargaining agreement are 
substantially at variance with those which prevail for services of a 
character similar in the locality, and/or that the collective bargaining 
agreement applicable to service employees employed under the predecessor 
contract was not entered into as a result of arm's-length negotiations, 
the Department will issue a new or revised wage determination setting 
forth the applicable wage rates and fringe benefits. Such determination 
shall be made part of the contract or subcontract, in accordance with 
the decision of the Administrator, the Administrative Law Judge, or the 
Administrative Review Board, as the case may be, irrespective of whether 
such issuance occurs prior to or after the award of a contract or 
subcontract. 53 Comp. Gen. 401 (1973). In the case of a wage 
determnation issued solely as a result of a finding of substantial 
variance, such determination shall be effective as of the date of the 
final administrative decision.
    (e) The contractor and any subcontractor under this contract shall 
notify each service employee commencing work on this contract of the 
minimum monetary wage and any fringe benefits required to be paid 
pursuant to this contract, or shall post the wage determination attached 
to this contract. The poster provided by the Department of Labor 
(Publication WH 1313) shall be posted in a prominent and accessible 
place at the worksite. Failure to comply with this requirement is a 
violation of section 2(a)(4) of the Act and of this contract.
    (f) The contractor or subcontractor shall not permit any part of the 
services called for by this contract to be performed in buildings or 
surroundings or under working conditions provided by or under the 
control or supervision of the contractor or subcontractor which are 
unsanitary or hazardous or dangerous to the health or safety of service 
employees engaged to furnish these services, and the contractor or 
subcontractor shall comply with the safety and health standards applied 
under 29 CFR part 1925.
    (g)(1) The contractor and each subcontractor performing work subject 
to the Act shall make and maintain for 3 years from the completion of 
the work records containing the information specified in paragraphs 
(g)(1)(i) through (vi) of this section for each employee subject to the 
Act and shall make them available for inspection and transcription by 
authorized representatives of the Wage and Hour Division of the U.S. 
Department of Labor:
    (i) Name and address and social security number of each employee.
    (ii) The correct work classification or classifications, rate or 
rates of monetary wages paid and fringe benefits provided, rate or rates 
of fringe benefit payments in lieu thereof, and total daily and weekly 
compensation of each employee.
    (iii) The number of daily and weekly hours so worked by each 
employee.
    (iv) Any deductions, rebates, or refunds from the total daily or 
weekly compensation of each employee.
    (v) A list of monetary wages and fringe benefits for those classes 
of service employees not included in the wage

[[Page 46]]

determination attached to this contract but for which such wage rates or 
fringe benefits have been determined by the interested parties or by the 
Administrator or authorized representative pursuant to the labor 
standards clause in paragraph (b) of this section. A copy of the report 
required by the clause in paragraph (b)(2)(ii) of this section shall be 
deemed to be such a list.
    (vi) Any list of the predecessor contractor's employees which had 
been furnished to the contractor pursuant to Sec. 4.6(l)(2).
    (2) The contractor shall also make available a copy of this contract 
for inspection or transcription by authorized representatives of the 
Wage and Hour Division.
    (3) Failure to make and maintain or to make available such records 
for inspection and transcription shall be a violation of the regulations 
and this contract, and in the case of failure to produce such records, 
the contracting officer, upon direction of the Department of Labor and 
notification of the contractor, shall take action to cause suspension of 
any further payment or advance of funds until such violation ceases.
    (4) The contractor shall permit authorized representatives of the 
Wage and Hour Division to conduct interviews with employees at the 
worksite during normal working hours.
    (h) The contractor shall unconditionally pay to each employee 
subject to the Act all wages due free and clear and without subsequent 
deduction (except as otherwise provided by law or Regulations, 29 CFR 
part 4), rebate, or kickback on any account. Such payments shall be made 
no later than one pay period following the end of the regular pay period 
in which such wages were earned or accrued. A pay period under this Act 
may not be of any duration longer than semi-monthly.
    (i) The contracting officer shall withhold or cause to be withheld 
from the Government prime contractor under this or any other Government 
contract with the prime contractor such sums as an appropriate official 
of the Department of Labor requests or such sums as the contracting 
officer decides may be necessary to pay underpaid employees employed by 
the contractor or subcontractor. In the event of failure to pay any 
employees subject to the Act all or part of the wages or fringe benefits 
due under the Act, the agency may, after authorization or by direction 
of the Department of Labor and written notification to the contractor, 
take action to cause suspension of any further payment or advance of 
funds until such violations have ceased. Additionally, any failure to 
comply with the requirements of these clauses relating to the Service 
Contract Act of 1965, may be grounds for termination of the right to 
proceed with the contract work. In such event, the Government may enter 
into other contracts or arrangements for completion of the work, 
charging the contractor in default with any additional cost.
    (j) The contractor agrees to insert these clauses in this section 
relating to the Service Contract Act of 1965 in all subcontracts subject 
to the Act. The term contractor as used in these clauses in any 
subcontract, shall be deemed to refer to the subcontractor, except in 
the term Government prime contractor.
    (k)(1) As used in these clauses, the term service employee means any 
person engaged in the performance of this contract other than any person 
employed in a bona fide executive, administrative, or professional 
capacity, as those terms are defined in part 541 of title 29, Code of 
Federal Regulations, as of July 30, 1976, and any subsequent revision of 
those regulations. The term service employee includes all such persons 
regardless of any contractual relationship that may be alleged to exist 
between a contractor or subcontractor and such persons.
    (2) The following statement is included in contracts pursuant to 
section 2(a)(5) of the Act and is for informational purposes only:
    The following classes of service employees expected to be employed 
under the contract with the Government would be subject, if employed by 
the contracting agency, to the provisions of 5 U.S.C. 5341 or 5 U.S.C. 
5332 and would, if so employed, be paid not less than the following 
rates of wages and fringe benefits:

[[Page 47]]



------------------------------------------------------------------------
                                                               Monetary
                       Employee class                        wage-fringe
                                                               benefits
------------------------------------------------------------------------
                                                             ...........
                                                             ...........
                                                             ...........
------------------------------------------------------------------------

    (l)(1) If wages to be paid or fringe benefits to be furnished any 
service employees employed by the Government prime contractor or any 
subcontractor under the contract are provided for in a collective 
bargaining agreement which is or will be effective during any period in 
which the contract is being performed, the Government prime contractor 
shall report such fact to the contracting officer, together with full 
information as to the application and accrual of such wages and fringe 
benefits, including any prospective increases, to service employees 
engaged in work on the contract, and a copy of the collective bargaining 
agreement. Such report shall be made upon commencing performance of the 
contract, in the case of collective bargaining agreements effective at 
such time, and in the case of such agreements or provisions or 
amendments thereof effective at a later time during the period of 
contract performance, such agreements shall be reported promptly after 
negotiation thereof.
    (2) Not less than 10 days prior to completion of any contract being 
performed at a Federal facility where service employees may be retained 
in the performance of the succeeding contract and subject to a wage 
determination which contains vacation or other benefit provisions based 
upon length of service with a contractor (predecessor) or successor 
(Sec. 4.173 of Regulations, 29 CFR part 4), the incumbent prime 
contractor shall furnish to the contracting officer a certified list of 
the names of all service employees on the contractor's or 
subcontractor's payroll during the last month of contract performance. 
Such list shall also contain anniversary dates of employment on the 
contract either with the current or predecessor contractors of each such 
service employee. The contracting officer shall turn over such list to 
the successor contractor at the commencement of the succeeding contract.
    (m) Rulings and interpretations of the Service Contract Act of 1965, 
as amended, are contained in Regulations, 29 CFR part 4.
    (n)(1) By entering into this contract, the contractor (and officials 
thereof) certifies that neither it (nor he or she) nor any person or 
firm who has a substantial interest in the contractor's firm is a person 
or firm ineligible to be awarded Government contracts by virtue of the 
sanctions imposed pursuant to section 5 of the Act.
    (2) No part of this contract shall be subcontracted to any person or 
firm ineligible for award of a Government contract pursuant to section 5 
of the Act.
    (3) The penalty for making false statements is prescribed in the 
U.S. Criminal Code, 18 U.S.C. 1001.
    (o) Notwithstanding any of the clauses in paragraphs (b) through (m) 
of this section relating to the Service Contract Act of 1965, the 
following employees may be employed in accordance with the following 
variations, tolerances, and exemptions, which the Secretary of Labor, 
pursuant to section 4(b) of the Act prior to its amendment by Public Law 
92-473, found to be necessary and proper in the public interest or to 
avoid serious impairment of the conduct of Government business:
    (1) Apprentices, student-learners, and workers whose earning 
capacity is impaired by age, physical, or mental deficiency or injury 
may be employed at wages lower than the minimum wages otherwise required 
by section 2(a)(1) or 2(b)(1) of the Service Contract Act without 
diminishing any fringe benefits or cash payments in lieu thereof 
required under section 2(a)(2) of that Act, in accordance with the 
conditions and procedures prescribed for the employment of apprentices, 
student-learners, handicapped persons, and handicapped clients of 
sheltered workshops under section 14 of the Fair Labor Standards Act of 
1938, in the regulations issued by the Administrator (29 CFR parts 520, 
521, 524, and 525).
    (2) The Administrator will issue certificates under the Service 
Contract Act for the employment of apprentices, student-learners, 
handicapped persons, or handicapped clients of sheltered workshops not 
subject to the Fair Labor Standards Act of 1938, or subject to different 
minimum rates of pay

[[Page 48]]

under the two acts, authorizing appropriate rates of minimum wages (but 
without changing requirements concerning fringe benefits or 
supplementary cash payments in lieu thereof), applying procedures 
prescribed by the applicable regulations issued under the Fair Labor 
Standards Act of 1938 (29 CFR parts 520, 521, 524, and 525).
    (3) The Administrator will also withdraw, annul, or cancel such 
certificates in accordance with the regulations in parts 525 and 528 of 
title 29 of the Code of Federal Regulations.
    (p) Apprentices will be permitted to work at less than the 
predetermined rate for the work they perform when they are employed and 
individually registered in a bona fide apprenticeship program registered 
with a State Apprenticeship Agency which is recognized by the U.S. 
Department of Labor, or if no such recognized agency exists in a State, 
under a program registered with the Bureau of Apprenticeship and 
Training, Employment and Training Administration, U.S. Department of 
Labor. Any employee who is not registered as an apprentice in an 
approved program shall be paid the wage rate and fringe benefits 
contained in the applicable wage determination for the journeyman 
classification of work actually performed. The wage rates paid 
apprentices shall not be less than the wage rate for their level of 
progress set forth in the registered program, expressed as the 
appropriate percentage of the journeyman's rate contained in the 
applicable wage determination. The allowable ratio of apprentices to 
journeymen employed on the contract work in any craft classification 
shall not be greater than the ratio permitted to the contractor as to 
his entire work force under the registered program.
    (q) Where an employee engaged in an occupation in which he or she 
customarily and regularly receives more than $30 a month in tips, the 
amount of tips received by the employee may be credited by the employer 
against the minimum wage required by Section 2(a)(1) or 2(b)(1) of the 
Act to the extent permitted by section 3(m) of the Fair Labor Standards 
Act and Regulations, 29 CFR part 531. To utilize this proviso:
    (1) The employer must inform tipped employees about this tip credit 
allowance before the credit is utilized;
    (2) The employees must be allowed to retain all tips (individually 
or through a pooling arrangement and regardless of whether the employer 
elects to take a credit for tips received);
    (3) The employer must be able to show by records that the employee 
receives at least the applicable Service Contract Act minimum wage 
through the combination of direct wages and tip credit;
    (4) The use of such tip credit must have been permitted under any 
predecessor collective bargaining agreement applicable by virtue of 
section 4(c) of the Act.
    (r) Disputes concerning labor standards. Disputes arising out of the 
labor standards provisions of this contract shall not be subject to the 
general disputes clause of this contract. Such disputes shall be 
resolved in accordance with the procedures of the Department of Labor 
set forth in 29 CFR parts 4, 6, and 8. Disputes within the meaning of 
this clause include disputes between the contractor (or any of its 
subcontractors) and the contracting agency, the U.S. Department of 
Labor, or the employees or their representatives.

(The information collection, recordkeeping, and reporting requirements 
contained in this section have been approved by the Office of Management 
and Budget under the following numbers:

------------------------------------------------------------------------
                                                            OMB Control
                        Paragraph                               No.
------------------------------------------------------------------------
(b)(2)(i)-(iv)..........................................       1235-0007
(e).....................................................       1235-0007
(g)(1)(i)-(iv)..........................................       1235-0007
                                                               1235-0018
(g)(1)(v)-(vi)..........................................       1235-0007
(l)(1), (2).............................................       1235-0007
(q)(3)..................................................       1235-0007
------------------------------------------------------------------------


[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983, as amended at 61 
FR 68663, Dec. 30, 1996; 82 FR 2224, Jan. 9, 2017]



Secs. 4.7-4.9  [Reserved]



Sec. 4.10  Substantial variance proceedings under section 4(c) of the Act.

    (a) Statutory provision. Under section 4(c) of the Act, and under 
corresponding wage determinations made

[[Page 49]]

as provided in section 2(a)(1) and (2) of the Act, contractors and 
subcontractors performing contracts subject to the Act generally are 
obliged to pay to service employees employed on the contract work wages 
and fringe benefits not less than those to which they would have been 
entitled under a collective bargaining agreement if they were employed 
on like work under a predecessor contract in the same locality. (See 
Secs. 4.1b, 4.3, 4.6(d)(2).) Section 4(c) of the Act provides, however, 
that ``such obligations shall not apply if the Secretary finds after a 
hearing in accordance with regulations adopted by the Secretary that 
such wages and fringe benefits are substantially at variance with those 
which prevail for services of a character similar in the locality''.
    (b) Prerequisites for hearing. (1)(i) A request for a hearing under 
this section may be made by the contracting agency or other person 
affected or interested, including contractors or prospective contractors 
and associations of contractors, representatives of employees, and other 
interested Governmental agencies. Such a request shall be submitted in 
writing to the Administrator, Wage and Hour Division, U.S. Department of 
Labor, Washington, DC 20210, and shall include the following:
    (A) The number of any wage determination at issue, the name of the 
contracting agency whose contract is involved, and a brief description 
of the services to be performed under the contract;
    (B) A statement regarding the status of the procurement and any 
estimated procurement dates, such as bid opening, contract award, 
commencement date of the contract or its follow-up option period;
    (C) A statement of the applicant's case, setting forth in detail the 
reasons why the applicant believes that a substantial variance exists 
with respect to some or all of the wages and/or fringe benefits, 
attaching available data concerning wages and/or fringe benefits 
prevailing in the locality;
    (D) Names and addresses (to the extent known) of interested parties.
    (ii) If the information in paragraph (b)(1)(i) of this section is 
not submitted with the request, the Administrator may deny the request 
or request supplementary information, at his/her discretion. No 
particular form is prescribed for submission of a request under this 
section.
    (2) The Administrator will respond to the party requesting a hearing 
within 30 days after receipt, granting or denying the request or 
advising that additional time is necessary for a decision. No hearing 
will be provided pursuant to this section and section 4(c) of the Act 
unless the Administrator determines from information available or 
submitted with a request for such a hearing that there may be a 
substantial variance between some or all of the wage rates and/or fringe 
benefits provided for in a collective bargaining agreement to which the 
service employees would otherwise be entitled by virtue of the 
provisions of section 4(c) of the Act, and those which prevail for 
services of a character similar in the locality.
    (3) Pursuant to section 4(b) of the Act, requests for a hearing 
shall not be considered unless received as specified below, except in 
those situations where the Administrator determines that extraordinary 
circumstances exist:
    (i) For advertised contracts, prior to ten days before the award of 
the contract;
    (ii) For negotiated contracts and for contracts with provisions 
extending the initial term by option, prior to the commencement date of 
the contract or the follow-up option period, as the case may be.
    (c) Referral to the Chief Administrative Law Judge. When the 
Administrator determines from the information available or submitted 
with a request for a hearing that there may be a substantial variance, 
the Administrator on his/her own motion or on application of any 
interested person will by order refer the issue to the Chief 
Administrative Law Judge, for designation of an Administrative Law Judge 
who shall conduct such a fact finding hearing as may be necessary to 
render a decision solely on the issue of whether the wages and/or fringe 
benefits contained in the collective bargaining agreement which was the 
basis for the wage determination at issue are substantially at variance 
with those which prevail for

[[Page 50]]

services of a character similar in the locality. However, in situations 
where there is also a question as to whether the collective bargaining 
agreement was reached as a result of ``arm's-length negotiations'' (see 
Sec. 4.11), the referral shall include both issues for resolution in one 
proceeding. No authority is delegated under this section to hear and/or 
decide any other issues pertaining to the Service Contract Act. As 
provided in section 4(a) of the Act, the provisions of section 4 and 5 
of the Walsh-Healey Public Contracts Act (41 U.S.C. 38, 39) shall be 
applicable to such proceeding, which shall be conducted in accordance 
with the procedures set forth at 29 CFR part 6.
    (d) The Administrator shall be an interested party and shall have 
the opportunity to participate in the proceeding to the degree he/she 
considers appropriate.

[48 FR 49762, Oct. 27, 1983, as amended at 82 FR 2225, Jan. 9, 2017]



Sec. 4.11  Arm's length proceedings.

    (a) Statutory provision. Under section 4(c) of the Act, the wages 
and fringe benefits provided in the predecessor contractor's collective 
bargaining agreement must be reached ``as a result of arm's-length 
negotiations.'' This provision precludes arrangements by parties to a 
collective bargaining agreement who, either separately or together, act 
with an intent to take advantage of the wage determination scheme 
provided for in sections 2(a) and 4(c) of the Act. See Trinity Services, 
Inc. v. Marshall, 593 F.2d 1250 (D.C. Cir. 1978). A finding as to 
whether a collective bargaining agreement or particular wages and fringe 
benefits therein are reached as a result of arm's-length negotiations 
may be made through investigation, hearing or otherwise pursuant to the 
Secretary's authority under section 4(a) of the Act.
    (b) Prerequisites for hearing. (1) A request for a determination 
under this section may be made by a contracting agency or other person 
affected or interested, including contractors or prospective contractors 
and associations of contractors, representatives of employees, and 
interested Governmental agencies. Such a request shall be submitted in 
writing to the Administrator, Wage and Hour Division, U.S. Department of 
Labor, Washington, DC 20210. Although no particular form is prescribed 
for submission of a request under this section, such request shall 
include the following information:
    (i) A statement of the applicant's case setting forth in detail the 
reasons why the applicant believes that the wages and fringe benefits 
contained in the collective bargaining agreement were not reached as a 
result of arm's-length negotiations;
    (ii) A statement regarding the status of the procurement and any 
estimated procurement dates, such as bid opening, contract award, 
commencement date of the contract or its follow-up option period;
    (iii) Names and addresses (to the extent known) of interested 
parties.
    (2) Pursuant to section 4(b) of the Act, requests for a hearing 
shall not be considered unless received as specified below except in 
those situations where the Administrator determines that extraordinary 
circumstances exist:
    (i) For advertised contracts, prior to ten days before the award of 
the contract;
    (ii) For negotiated contracts and for contracts with provisions 
extending the term by option, prior to the commencement date of the 
contract or the follow-up option period, as the case may be.
    (c)(1) The Administrator, on his/her own motion or after receipt of 
a request for a determination, may make a finding on the issue of arm's-
length negotiations.
    (2) If the Administrator determines that there may not have been 
arm's-length negotiations, but finds that there is insufficient evidence 
to render a final decision thereon, the Administrator may refer the 
issue to the Chief Administrative Law Judge in accordance with paragraph 
(d) of this section.
    (3)(i) If the Administrator finds that the collective bargaining 
agreement or wages and fringe benefits at issue were reached as a result 
of arm's-length negotiations or that arm's-length negotiations did not 
take place, the interested parties, including the parties to the 
collective bargaining agreement, will be notified of the Administrator's

[[Page 51]]

findings, which shall include the reasons therefor, and such parties 
shall be afforded an opportunity to request that a hearing be held to 
render a decision on the issue of arm's-length negotiations.
    (ii) Such parties shall have 20 days from the date of the 
Administrator's ruling to request a hearing. A detailed statement of the 
reasons why the Administrator's ruling is in error, including facts 
alleged to be in dispute, if any, shall be submitted with the request 
for a hearing.
    (iii) If no hearing is requested within the time mentioned in 
paragraph (c)(3)(ii) of this section, the Administrator's ruling shall 
be final, and, in the case of a finding that arm's-length negotiations 
did not take place, a new wage determination will be issued for the 
contract. If a hearing is requested, the decision of the Administrator 
shall be inoperative.
    (d) Referral to the Chief Administrative Law Judge. The 
Administrator on his/her own motion, under paragraph (c)(2) of this 
section or upon a request for a hearing under paragraph (c)(3)(ii) of 
this section where the Administrator determines that material facts are 
in dispute, shall by order refer the issue to the Chief Administrative 
Law Judge for designation of an Administrative Law Judge, who shall 
conduct such hearings as may be necessary to render a decision solely on 
the issue of arm's-length negotiations. However, in situations where 
there is also a question as to whether some or all of the collectively 
bargained wage rates and/or fringe benefits are substantially at 
variance (see Sec. 4.10), the referral shall include both issues for 
resolution in one proceeding. As provided in section 4(a) of the Act, 
the provisions of sections 4 and 5 of the Walsh-Healey Public Contracts 
Act (41 U.S.C. 38, 39) shall be applicable to such proceeding, which 
shall be conducted in accordance with the procedures set forth at 29 CFR 
part 6.
    (e) Referral to the Administrative Review Board. When a party 
requests a hearing under paragraph (c)(3)(ii) of this section and the 
Administrator determines that no material facts are in dispute, the 
Administrator shall refer the issue and the record compiled thereon to 
the Administrative Review Board to render a decision solely on the issue 
of arm's-length negotiations. Such proceeding shall be conducted in 
accordance with the procedures set forth at 29 CFR part 8.

[48 FR 49762, Oct. 27, 1983, as amended at 82 FR 2225, Jan. 9, 2017]



Sec. 4.12  Substantial interest proceedings.

    (a) Statutory provision. Under section 5(a) of the Act, no contract 
of the United States (or the District of Columbia) shall be awarded to 
the persons or firms appearing on the list distributed by the 
Comptroller General giving the names of persons or firms who have been 
found to have violated the Act until 3 years have elapsed from the date 
of publication of the list. Section 5(a) further states that ``no 
contract of the United States shall be awarded * * * to any firm, 
corporation, partnership, or association in which such persons or firms 
have a substantial interest * * * .'' A finding as to whether persons or 
firms whose names appear on the debarred bidders list have a substantial 
interest in any other firm, corporation, partnership, or association may 
be made through investigation, hearing, or otherwise pursuant to the 
Secretary's authority under section 4(a) of the Act.
    (b) Ineligibility. See Sec. 4.188 of this part for the Secretary's 
rulings and interpretations with respect to substantial interest.
    (c)(1) A request for a determination under this section may be made 
by any interested party, including contractors or prospective 
contractors, and associations of contractors, representatives of 
employees, and interested Government agencies. Such a request shall be 
submitted in writing to the Administrator, Wage and Hour Division, U.S. 
Department of Labor, Washington, DC 20210.
    (2) The request shall include a statement setting forth in detail 
why the petitioner believes that a person or firm whose name appears on 
the debarred bidders list has a substantial interest in any firm, 
corporation, partnership, or association which is seeking or has been 
awarded a contract of

[[Page 52]]

the United States or the District of Columbia. No particular form is 
prescribed for the submission of a request under this section.
    (d)(1) The Administrator, on his/her own motion or after receipt of 
a request for a determination, may make a finding on the issue of 
substantial interest.
    (2) If the Administrator determines that there may be a substantial 
interest, but finds that there is insufficient evidence to render a 
final ruling thereon, the Administrator may refer the issue to the Chief 
Administrative Law Judge in accordance with paragraph (e) of this 
section.
    (3) If the Administrator finds that no substantial interest exists, 
or that there is not sufficient information to warrant the initiation of 
an investigation, the requesting party, if any, will be so notified and 
no further action taken.
    (4)(i) If the Administrator finds that a substantial interest 
exists, the person or firm affected will be notified of the 
Administrator's finding, which shall include the reasons therefor, and 
such person or firm shall be afforded an opportunity to request that a 
hearing be held to render a decision on the issue of substantial 
interest.
    (ii) Such person or firm shall have 20 days from the date of the 
Administrator's ruling to request a hearing. A detailed statement of the 
reasons why the Administrator's ruling is in error, including facts 
alleged to be in dispute, if any, shall be submitted with the request 
for a hearing.
    (iii) If no hearing is requested within the time mentioned in 
paragraph (d)(4)(ii) of this section, the Administrator's finding shall 
be final and the Administrator shall so notify the Comptroller General. 
If a hearing is requested, the decision of the Administrator shall be 
inoperative unless and until the Administrative Law Judge or the 
Administrative Review Board issues an order that there is a substantial 
interest.
    (e) Referral to the Chief Administrative Law Judge. The 
Administrator on his/her own motion, or upon a request for a hearing 
where the Administrator determines that relevant facts are in dispute, 
shall by order refer the issue to the Chief Administrative Law Judge, 
for designation of an Administrative Law Judge who shall conduct such 
hearings as may be necessary to render a decision solely on the issue of 
substantial interest. As provided in section 4(a) of the Act, the 
provisions of sections 4 and 5 of the Walsh-Healey Public Contracts Act 
(41 U.S.C. 38, 39) shall be applicable to such proceedings, which shall 
be conducted in accordance with the procedures set forth at 29 CFR part 
6.
    (f) Referral to the Administrative Review Board. When the person or 
firm requests a hearing and the Administrator determines that relevant 
facts are not in dispute, the Administrator will refer the issue and the 
record compiled thereon to the Administrative Review Board to render a 
decision solely on the issue of substantial interest. Such proceeding 
shall be conducted in accordance with the procedures set forth at 29 CFR 
part 8.

[48 FR 49762, Oct. 27, 1983, as amended at 82 FR 2225, Jan. 9, 2017]



                 Subpart B_Wage Determination Procedures



Sec. 4.50  Types of wage and fringe benefit determinations.

    The Administrator specifies the minimum monetary wages and fringe 
benefits to be paid as required under the Act in two types of 
determinations:
    (a) Prevailing in the locality. (1) Determinations that set forth 
minimum monetary wages and fringe benefits determined to be prevailing 
for various classes of service employees in the locality (sections 
2(a)(1) and 2(a)(2) of the Act) after giving ``due consideration'' to 
the rates applicable to such service employees if directly hired by the 
Federal Government (section 2(a)(5) of the Act).
    (2) The prevailing wage determinations applicable to most contracts 
covered by the Act are based upon cross-industry survey data. However, 
in some cases the Department of Labor may issue industry specific wage 
determinations for application to specific types of service contracts. 
In addition, the geographic scope of contracts is often different and 
the geographic scope of the underlying survey data for the

[[Page 53]]

wage determinations applicable to those contracts may be different. 
Therefore, a variety of different prevailing wage determinations may be 
applicable in a particular locality. The application of these different 
prevailing wage determinations will depend upon the nature of the 
contracts to which they are applied.
    (b) Collective Bargaining Agreement--(Successorship). Determinations 
that set forth the wage rates and fringe benefits, including accrued and 
prospective increases, contained in a collective bargaining agreement 
applicable to the service employees who performed on a predecessor 
contract in the same locality. (See sections 2(a)(1) and (2) as well as 
4(c) of the Act.)

[70 FR 50898, Aug. 26, 2005]



Sec. 4.51  Prevailing in the locality determinations.

    (a) Information considered. The minimum monetary wages and fringe 
benefits set forth in determinations of the Secretary are based on all 
available pertinent information as to wage rates and fringe benefits 
being paid at the time the determination is made. Such information is 
most frequently derived from area surveys made by the Bureau of Labor 
Statistics, U.S. Department of Labor, or other Labor Department 
personnel. Information may also be obtained from Government contracting 
officers and from other available sources, including employees and their 
representatives and employers and their associations. The determinations 
may be based on the wage rates and fringe benefits contained in 
collective bargaining agreements where they have been determined to 
prevail in a locality for specified occupational class(es) of employees.
    (b) Determination of prevailing rates. Where a single rate is paid 
to a majority (50 percent or more) of the workers in a class of service 
employees engaged in similar work in a particular locality, that rate is 
determined to prevail. The wage rates and fringe benefits in a 
collective bargaining agreement covering 2,001 janitors in a locality, 
for example, prevail if it is determined that no more than 4,000 workers 
are engaged in such janitorial work in that locality. In the case of 
information developed from surveys, statistical measurements of central 
tendency such as a median (a point in a distribution of wage rates where 
50 percent of the surveyed workers receive that or a higher rate and an 
equal number receive a lesser rate) or the mean (average) are considered 
reliable indicators of the prevailing rate. Which of these statistical 
measurements will be applied in a given case will be determined after a 
careful analysis of the overall survey, separate classification data, 
patterns existing between survey periods, and the way the separate 
classification data interrelate. Use of the median is the general rule. 
However, the mean (average) rate may be used in situations where, after 
analysis, it is determined that the median is not a reliable indicator. 
Examples where the mean may be used include situations where:
    (1) The number of workers studied for the job classification 
constitutes a relatively small sample and the computed median results in 
an actual rate that is paid to few of the studied workers in the class;
    (2) Statistical deviation such as a skewed (bimodal or multimodal) 
frequency distribution biases the median rate due to large 
concentrations of workers toward either end of the distribution curve 
and the computed median results in an actual rate that is paid to few of 
the studied workers in the class; or
    (3) The computed median rate distorts historic wage relationships 
between job levels within a classification family (i.e., Electronic 
Technician Classes A, B, and C levels within the Electronic technician 
classification family), between classifications of different skill 
levels (i.e., a maintenance electrician as compared with a maintenance 
carpenter), or, for example, yields a wage movement inconsistent with 
the pattern shown by the survey overall or with related and/or similarly 
skilled job classifications.
    (c) Slotting wage rates. In some instances, a wage survey for a 
particular locality may result in insufficient data for one or more job 
classifications that are required in the performance of a contract. 
Establishment of a prevailing wage rate for certain such classifications 
may be accomplished through a

[[Page 54]]

``slotting'' procedure, such as that used under the Federal pay system. 
Under this procedure, wage rates are derived for a classification based 
on a comparison of equivalent or similar job duty and skill 
characteristics between the classifications studied and those for which 
no survey data is available. As an example, a wage rate found prevailing 
for the janitorial classification may be adopted for the classification 
of mess attendant if the skill and duties attributed to each 
classification are known to be rated similarly under pay classification 
schemes. (Both classifications are assigned the same wage grade under 
the Coordinated Federal Wage System and are paid at the Wage Board grade 
2 when hired directly by a Federal agency.)
    (d) Due consideration. In making wage and fringe benefit 
determinations, section 2(a)(5) of the Act requires that due 
consideration be given to the rates that would be paid by the Federal 
agency to the various classes of service employees if section 5341 or 
section 5332 of title 5 U.S.C., were applicable to them. Section 5341 
refers to the Wage Board or Coordinated Federal Wage System for ``blue 
collar'' workers and section 5332 refers to the General Schedule pay 
system for ``white collar'' workers. The term due consideration implies 
the exercise of discretion on the basis of the facts and circumstances 
surrounding each determination, recognizing the legislative objective of 
narrowing the gap between the wage rates and fringe benefits prevailing 
for service employees and those established for Federal employees. Each 
wage determination is based on a survey or other information on the wage 
rates and fringe benefits being paid in a particular locality and also 
takes into account those wage rates and fringe benefits which would be 
paid under Federal pay systems.



Sec. 4.52  Fringe benefit determinations.

    (a) Wage determinations issued pursuant to the Service Contract Act 
ordinarily contain provisions for vacation and holiday benefits 
prevailing in the locality. In addition, wage determinations contain a 
prescribed minimum rate for all other benefits, such as insurance, 
pension, etc., which are not required as a matter of law (i.e., 
excluding Social Security, unemployment insurance, and workers' 
compensation payments and similar statutory benefits), based upon the 
sum of the benefits contained in the U.S. Bureau of Labor Statistics, 
Employment Cost Index (ECI), for all employees in private industry, 
nationwide (and excluding ECI components for supplemental pay, such as 
shift differential, which are considered wages rather than fringe 
benefits under SCA). Pursuant to Section 4(b) of the Act and Sec. 4.123, 
the Secretary has determined that it is necessary and proper in the 
public interest, and in accord with remedial purposes of the Act to 
protect prevailing labor standards, to issue a variation from the Act's 
requirement that fringe benefits be determined for various classes of 
service employees in the locality.
    (b) The minimum rate for all benefits (other than holidays and 
vacation) which are not legally required, as prescribed in paragraph (a) 
of this section, shall be phased in over a four-year period beginning 
June 1, 1997. The first year the rate will be $.90 per hour plus one-
fourth of the difference between $.90 per hour and the rate prescribed 
in paragraph (a) of this section; the second year the rate will be 
increased by one-third of the difference between the rate set the first 
year and the rate prescribed; the third year the rate will be increased 
by one-half of the difference between the rate set in the second year 
and the rate prescribed; and the fourth year and thereafter the rate 
will be the rate prescribed in paragraph (a) of this section.
    (c) Where it is determined pursuant to Sec. 4.51(b) that a single 
fringe benefit rate is paid with respect to a majority of the workers in 
a class of service employees engaged in similar work in a locality, that 
rate will be determined to prevail notwithstanding the rate which would 
otherwise be prescribed pursuant to this section. Ordinarily, it will be 
found that a majority of workers receive fringe benefits at a single 
level where those workers are subject to a collective bargaining 
agreement whose provisions have been found to prevail in the locality.

[[Page 55]]

    (d) A significant number of contracts contain a prevailing fringe 
benefit rate of $2.56 per hour. Generally, these contracts are large 
base support contracts, contracts requiring competition from large 
corporations, contracts requiring highly technical services, and 
contracts solicited pursuant to A-76 procedures (displacement of Federal 
employees), as well as successor contracts thereto. The $2.56 benefit 
rate shall continue to be issued for all contracts containing the $2.56 
benefit rate, as well as resolicitations and other successor contracts 
for substantially the same services, until the fringe benefit rate 
determined in accordance with paragraphs (a) and (b) of this section 
equals or exceeds $2.56 per hour.
    (e) Variance procedure. (1) The Department will consider variations 
requested by contracting agencies pursuant to Section 4(b) of the Act 
and Sec. 4.123, from the methodology described in paragraph (a) of this 
section for determining prevailing fringe benefit rates. This variation 
procedure will not be utilized to routinely permit separate fringe 
benefit packages for classes of employees and industries, but rather 
will be limited to the narrow circumstances set forth herein where 
special needs of contracting agencies require this procedure. Such 
variations will be considered where the agency demonstrates that because 
of the special circumstances of the particular industry, the variation 
is necessary and proper in the public interest or to avoid the serious 
impairment of government business. Such a demonstration might be made, 
for example, where an agency is unable to obtain contractors willing to 
bid on a contract because the service will be performed at the 
contractor's facility by employees performing work for the Government 
and other customers, and as a result, paying the required SCA fringe 
benefits would cause undue disruption to the contractor's own work force 
and pay practices.
    (2) It will also be necessary for the agency to demonstrate that a 
variance is in accordance with the remedial purpose of the Act to 
protect prevailing labor standards, by providing comprehensive data from 
a valid survey demonstrating the prevailing fringe benefits for the 
specific industry. If the agency does not continue to provide current 
data in subsequent years, the variance will be withdrawn and the rate 
prescribed in paragraph (a) of this section will be issued for the 
contract.

[61 FR 68664, Dec. 30, 1996]



Sec. 4.53  Collective bargaining agreement (successorship) determinations.

    Determinations based on the collective bargaining agreement of a 
predecessor contractor set forth by job classification each provision 
relating to wages (such as the established straight time hourly or 
salary rate, cost-of-living allowance, and any shift, hazardous, and 
other similar pay differentials) and to fringe benefits (such as holiday 
pay, vacation pay, sick leave pay, life, accidental death, disability, 
medical, and dental insurance plans, retirement or pension plans, 
severance pay, supplemental unemployment benefits, saving and thrift 
plans, stock-option plans, funeral leave, jury/witness leave, or 
military leave) contained in the predecessor's collective bargaining 
agreement, as well as conditions governing the payment of such wages and 
fringe benefits. Accrued wages and fringe benefits and prospective 
increases therein are also included. Each wage determination is limited 
in application to a specific contract succeeding a contract which had 
been performed in the same locality by a contractor with a collective 
bargaining agreement, and contains a notice to prospective bidders 
regarding their obligations under section 4(c) of the Act.

[48 FR 49762, Oct. 27, 1983. Redesignated at 61 FR 68664, Dec. 30, 1996]



Sec. 4.54  Locality basis of wage and fringe benefit determinations.

    (a) Under section 2(a) of the Act, the Secretary or his authorized 
representative is given the authority to determine the minimum monetary 
wages and fringe benefits prevailing for various classes of service 
employees ``in the locality''. Although the term locality has reference 
to a geographic area, it has an elastic and variable meaning and 
contemplates consideration of the existing wage structures which are 
pertinent to the employment of particular

[[Page 56]]

classes of service employees on the varied kinds of service contracts. 
Because wage structures are extremely varied, there can be no precise 
single formula which would define the geographic limits of a 
``locality'' that would be relevant or appropriate for the determination 
of prevailing wage rates and prevailing fringe benefits in all 
situations under the Act. The locality within which a wage or fringe 
benefit determination is applicable is, therefore, defined in each such 
determination upon the basis of all the facts and circumstances 
pertaining to that determination. Locality is ordinarily limited 
geographically to a particular county or cluster of counties comprising 
a metropolitan area. For example, a survey by the Bureau of Labor 
Statistics of the Baltimore, Maryland Standard Metropolitan Statistical 
Area includes the counties of Baltimore, Harford, Howard, Anne Arundel, 
and the City of Baltimore. A wage determination based on such 
information would define locality as the same geographic area included 
within the scope of the survey. Locality may also be defined as, for 
example, a city, a State, or, under rare circumstances, a region, 
depending on the actual place or places of contract performance, the 
geographical scope of the data on which the determination was based, the 
nature of the services being contracted for, and the procurement method 
used. In addition, in Southern Packaging & Storage Co. v. United States, 
618 F.2d 1088 (4th Cir. 1980), the court held that a nationwide wage 
determination normally is not permissible under the Act, but postulated 
that ``there may be the rare and unforeseen service contract which might 
be performed at locations throughout the country and which would 
generate truly nationwide competition''.
    (b) Where the services are to be performed for a Federal agency at 
the site of the successful bidder, in contrast to services to be 
performed at a specific Federal facility or installation, or in the 
locality of such installation, the location where the work will be 
performed often cannot be ascertained at the time of bid advertisement 
or solicitation. In such instances, wage determinations will generally 
be issued for the various localities identified by the agency as set 
forth in Sec. 4.4(a)(3)(i).
    (c) Where the wage rates and fringe benefits contained in a 
collective bargaining agreement applicable to the predecessor contract 
are set forth in a determination, locality in such a determination is 
typically described as the geographic area in which the predecessor 
contract was performed. The determination applies to any successor 
contractor which performs the contract in the same locality. However, 
see Sec. 4.163(i).

[48 FR 49762, Oct. 27, 1983. Redesignated at 61 FR 68664, Dec. 30, 1996, 
and amended at 70 FR 50898, Aug. 26, 2005]



Sec. 4.55  Issuance and revision of wage determinations.

    (a) Determinations will be reviewed periodically and where 
prevailing wage rates or fringe benefits have changed, such changes will 
be reflected in revised determinations. For example, in a locality where 
it is determined that the wage rate which prevails for a particular 
class of service employees is the rate specified in a collective 
bargaining agreement(s) applicable in that locality, and such 
agreement(s) specifies increases in such rates to be effective on 
specific dates, the determinations would be revised to reflect such 
changes as they become effective. Revised determinations shall be 
applicable to contracts in accordance with the provisions of Sec. 4.5(a) 
of subpart A.
    (b) Determinations issued by the Wage and Hour Division with respect 
to particular contracts are required to be incorporated in the 
invitations for bids or requests for proposals or quotations issued by 
the contracting agencies, and are to be incorporated in the contract 
specifications in accordance with Sec. 4.5 of subpart A. In this manner, 
prospective contractors and subcontractors are advised of the minimum 
monetary wages and fringe benefits required under the most recently 
applicable determination to be paid the service employees who perform 
the contract work. These requirements are the same for all bidders so 
none will be placed at a competitive disadvantage.
    (c) Determinations issued by the Wage and Hour Division with respect 
to particular contracts are required to

[[Page 57]]

be incorporated in the invitations for bids or requests for proposals or 
quotations issued by the contracting agencies, and are to be 
incorporated in the contract specifications in accordance with Sec. 4.5 
of subpart A. In this manner, prospective contractors and subcontractors 
are advised of the minimum monetary wages and fringe benefits required 
under the most recently applicable determination to be paid the service 
employees who perform the contract work. These requirements are, of 
course, the same for all bidders so none will be placed at a competitive 
disadvantage.

[48 FR 49762, Oct. 27, 1983. Redesignated at 61 FR 68664, Dec. 30, 1996; 
70 FR 50898, Aug. 26, 2005]



Sec. 4.56  Review and reconsideration of wage determinations.

    (a) Review by the Administrator. (1) Any interested party affected 
by a wage determination issued under section 2(a) of the Act may request 
review and reconsideration by the Administrator. A request for review 
and reconsideration may be made by the contracting agency or other 
interested party, including contractors or prospective contractors and 
associations of contractors, representatives of employees, and other 
interested Governmental agencies. Any such request must be accompanied 
by supporting evidence. In no event shall the Administrator review a 
wage determination or its applicability after the opening of bids in the 
case of a competitively advertised procurement, or, later than 10 days 
before commencement of a contract in the case of a negotiated 
procurement, exercise of a contract option or extension. This limitation 
is necessary in order to ensure competitive equality and an orderly 
procurement process.
    (2) The Administrator shall, upon receipt of a request for 
reconsideration, review the data sources relied upon as a basis for the 
wage determination, the evidence furnished by the party requesting 
review or reconsideration, and, if necessary to resolve the matter, any 
additional information found to be relevant to determining prevailing 
wage rates and fringe benefits in a particular locality. The 
Administrator, pursuant to a review of available information, may issue 
a new wage determination, may cause the wage determination to be 
revised, or may affirm the wage determination issued, and will notify 
the requesting party in writing of the action taken. The Administrator 
will render a decision within 30 days of receipt of the request or will 
notify the requesting party in writing within 30 days of receipt that 
additional time is necessary.
    (b) Review by the Administrative Review Board. Any decision of the 
Administrator under paragraph (a) of this section may be appealed to the 
Administrative Review Board within 20 days of issuance of the 
Administrator's decision. Any such appeal shall be in accordance with 
the provisions of part 8 of this title.

[48 FR 49762, Oct. 27, 1983. Redesignated at 61 FR 68664, Dec. 30, 1996]



    Subpart C_Application of the McNamara-O'Hara Service Contract Act

                              Introductory



Sec. 4.101  Official rulings and interpretations in this subpart.

    (a) The purpose of this subpart is to provide, pursuant to the 
authority cited in Sec. 4.102, official rulings and interpretations with 
respect to the application of the McNamara-O'Hara Service Contract Act 
for the guidance of the agencies of the United States and the District 
of Columbia which may enter into and administer contracts subject to its 
provisions, the persons desiring to enter into such contracts with these 
agencies, and the contractors, subcontractors, and employees who perform 
work under such contracts.
    (b) These rulings and interpretations are intended to indicate the 
construction of the law and regulations which the Department of Labor 
believes to be correct and which will be followed in the administration 
of the Act unless and until directed otherwise by Act of Congress or by 
authoritative ruling of the courts, or if it is concluded upon 
reexamination of an interpretation that it is incorrect. See for 
example, Skidmore v. Swift & Co., 323 U.S. 134

[[Page 58]]

(1944); Roland Co. v. Walling, 326 U.S. 657 (1946); Endicott Johnson 
Corp. v. Perkins, 317 U.S. 501, 507-509 (1943); Perkins v. Lukens Steel 
Co., 310 U.S. 113, 128 (1940); United States v. Western Pacific Railroad 
Co., 352 U.S. 59 (1956). The Department of Labor (and not the 
contracting agencies) has the primary and final authority and 
responsibility for administering and interpreting the Act, including 
making determinations of coverage. See Woodside Village v. Secretary of 
Labor, 611 F. 2d 312 (9th Cir. 1980); Nello L. Teer Co. v. United 
States, 348 F.2d 533, 539-540 (Ct. Cl. 1965), cert. denied, 383 U.S. 
934; North Georgia Building & Construction Trades Council v. U.S. 
Department of Transportation, 399 F. Supp. 58, 63 (N.D. Ga. 1975) 
(Davis-Bacon Act); Curtiss-Wright Corp. v. McLucas, 364 F. Supp. 750, 
769-72 (D.N.J. 1973); and 43 Atty. Gen. Ops. __ (March 9, 1979); 53 
Comp. Gen. 647, 649-51 (1974); 57 Comp. Gen. 501, 506 (1978).
    (c) Court decisions arising under the Act (as well as under related 
remedial labor standards laws such as the Walsh-Healey Public Contracts 
Act, the Davis-Bacon Act, the Contract Work Hours and Safety Standards 
Act, and the Fair Labor Standards Act) which support policies and 
interpretations contained in this part are cited where it is believed 
that they may be helpful. On matters which have not been authoritatively 
determined by the courts, it is necessary for the Secretary of Labor and 
the Administrator to reach conclusions as to the meaning and the 
application of provisions of the law in order to carry out their 
responsibilities of administration and enforcement (Skidmore v. Swift & 
Co., 323 U.S. 134 (1944)). In order that these positions may be made 
known to persons who may be affected by them, official interpretations 
and rulings are issued by the Administrator with the advice of the 
Solicitor of Labor, as authorized by the Secretary (Secretary's Order 
No. 16-75, Nov. 21, 1975, 40 FR 55913; Employment Standards Order No. 2-
76, Feb. 23, 1976, 41 FR 9016). These interpretations are a proper 
exercise of the Secretary's authority. Idaho Sheet Metal Works v. Wirtz, 
383 U.S. 190, 208 (1966), reh. den. 383 U.S. 963 (1966). References to 
pertinent legislative history, decisions of the Comptroller General and 
of the Attorney General, and Administrative Law Judges' decisions are 
also made in this part where it appears they will contribute to a better 
understanding of the stated interpretations and policies.
    (d) The interpretations of the law contained in this part are 
official interpretations which may be relied upon. The Supreme Court has 
recognized that such interpretations of the Act ``provide a practical 
guide to employers and employees as to how the office representing the 
public interest in its enforcement will seek to apply it'' and 
``constitute a body of experience and informed judgment to which courts 
and litigants may properly resort for guidance'' (Skidmore v. Swift & 
Co., 323 U.S. 134 (1944)). Interpretations of the agency charged with 
administering an Act are generally afforded deference by the courts. 
(Griggs v. Duke Power Co., 401 U.S. 424, 433-34 (1971); Udall v. 
Tallman, 380 U.S. 1 (1965).) Some of the interpretations in this part 
relating to the application of the Act are interpretations of provisions 
which appeared in the original Act before its amendments in 1972 and 
1976. Accordingly, the Department of Labor considers these 
interpretations to be correct, since there were no amendments of the 
statutory provisions which they interpret. (United States v. Davison 
Fuel & Dock Co., 371 F.2d 705, 711-12 (C.A. 4, 1967).)
    (e) The interpretations contained herein shall be in effect until 
they are modified, rescinded, or withdrawn. This part supersedes and 
replaces certain interpretations previously published in the Federal 
Register and Code of Federal Regulations as part 4 of this chapter. 
Prior opinions, rulings, and interpretations and prior enforcement 
policies which are not inconsistent with the interpretations in this 
part or with the Act as amended are continued in effect; all other 
opinions, rulings, interpretations, and enforcement policies on the 
subjects discussed in the interpretations in this part, to the extent 
they are inconsistent with the rules herein stated, are superseded, 
rescinded, and withdrawn.

[[Page 59]]

    (f) Principles governing the application of the Act as set forth in 
this subpart are clarified or amplified in particular instances by 
illustrations and examples based on specific fact situations. Since such 
illustrations and examples cannot and are not intended to be exhaustive, 
or to provide guidance on every problem which may arise under the Act, 
no inference should be drawn from the fact that a subject or 
illustration is omitted.
    (g) It should not be assumed that the lack of discussion of a 
particular subject in this subpart indicates the adoption of any 
particular position by the Department of Labor with respect to such 
matter or to constitute an interpretation, practice, or enforcement 
policy. If doubt arises or a question exists, inquiries with respect to 
matters other than safety and health standards should be directed to the 
Administrator of the Wage and Hour Division, U.S. Department of Labor, 
Washington, DC 20210, or any regional office of the Wage and Hour 
Division. Safety and health inquiries should be addressed to the 
Assistant Secretary for Occupational Safety and Health, U.S. Department 
of Labor, Washington, DC 20210, or to any OSHA regional office. A full 
description of the facts and any relevant documents should be submitted 
if an official ruling is desired.

[48 FR 49762, Oct. 27, 1983, as amended at 82 FR 2225, Jan. 9, 2017]



Sec. 4.102  Administration of the Act.

    As provided by section 4 of the Act and under provisions of sections 
4 and 5 of the Walsh-Healey Public Contracts Act (49 Stat. 2036, 41 
U.S.C. 38, 39), which are made expressly applicable for the purpose, the 
Secretary of Labor is authorized and directed to administer and enforce 
the provisions of the McNamara-O'Hara Service Contract Act, to make 
rules and regulations, issue orders, make decisions, and take other 
appropriate action under the Act. The Secretary is also authorized to 
make reasonable limitations and to make rules and regulations allowing 
reasonable variations, tolerances, and exemptions to and from provisions 
of the Act (except section 10), but only in special circumstances where 
it is determined that such action is necessary and proper in the public 
interest or to avoid serious impairment of the conduct of Government 
business and is in accord with the remedial purposes of the Act to 
protect prevailing labor standards. The authority and enforcement powers 
of the Secretary under the Act are coextensive with the authority and 
powers under the Walsh-Healey Act. Curtiss Wright Corp. v. McLucas 364 
F. Supp. 750, 769 (D NJ 1973).



Sec. 4.103  The Act.

    The McNamara-O'Hara Service Contract Act of 1965 (Pub. L. 89-286, 79 
Stat. 1034, 41 U.S.C. 351 et seq.), hereinafter referred to as the Act, 
was approved by the President on October 22, 1965 (1 Weekly Compilation 
of Presidential Documents 428). It establishes standards for minimum 
compensation and safety and health protection of employees performing 
work for contractors and subcontractors on service contracts entered 
into with the Federal Government and the District of Columbia. It 
applies to contracts entered into pursuant to negotiations concluded or 
invitations for bids issued on or after January 20, 1966. It has been 
amended by Public Law 92-473, 86 Stat. 798; by Public Law 93-57, 87 
Stat. 140; and by Public Law 94-489, 90 Stat. 2358.



Sec. 4.104  What the Act provides, generally.

    The provisions of the Act apply to contracts, whether negotiated or 
advertised, the principal purpose of which is to furnish services in the 
United States through the use of service employees. Under its 
provisions, every contract subject to the Act (and any bid specification 
therefor) entered into by the United States or the District of Columbia 
in excess of $2,500 must contain stipulations as set forth in Sec. 4.6 
of this part requiring: (a) That specified minimum monetary wages and 
fringe benefits determined by the Secretary of Labor (based on wage 
rates and fringe benefits prevailing in the locality or, in specified 
circumstances, the wage rates and fringe benefits contained in a 
collective bargaining agreement applicable to employees who performed on 
a predecessor contract) be paid to service employees employed by

[[Page 60]]

the contractor or any subcontractor in performing the services 
contracted for; (b) that working conditions of such employees which are 
under the control of the contractor or subcontractor meet safety and 
health standards; and (c) that notice be given to such employees of the 
compensation due them under the minimum wage and fringe benefits 
provisions of the contract. Contractors performing work subject to the 
Act thus enter into competition to obtain Government business on terms 
of which they are fairly forewarned by inclusion in the contract. 
(Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 507 (1943).) The Act's 
purpose is to impose obligations upon those favored with Government 
business by precluding the use of the purchasing power of the Federal 
Government in the unfair depression of wages and standards of 
employment. (See H.R. Rep. No. 948, 89th Cong., 1st Sess. 2-3 (1965); S. 
Rep. No. 798, 89th Cong., 1st Sess. 3-4 (1965).) The Act does not permit 
the monetary wage rates specified in such a contract to be less than the 
minimum wage specified under section 6(a)(1) of the Fair Labor Standards 
Act, as amended (29 U.S.C. 206(a)(1)). In addition, it is a violation of 
the Act for any contractor or subcontractor under a Federal contract 
subject to the Act, regardless of the amount of the contract, to pay any 
of his employees engaged in performing work on the contract less than 
such Fair Labor Standards Act minimum wage. Contracts of $2,500 or less 
are not, however, required to contain the stipulations described above. 
These provisions of the Service Contract Act are implemented by the 
regulations contained in this part 4 and are discussed in more detail in 
subsequent sections of subparts C, D, and E.



Sec. 4.105  The Act as amended.

    (a) The provisions of the Act (see Secs. 4.102-4.103) were amended, 
effective October 9, 1972, by Public Law 92-473, signed into law by the 
President on that date. By virtue of amendments made to paragraphs (1) 
and (2) of section 2(a) and the addition to section 4 of a new 
subsection (c), the compensation standards of the Act (see Secs. 4.159-
4.179) were revised to impose on successor contractors certain 
requirements (see Sec. 4.1b) with respect to payment of wage rates and 
fringe benefits based on those agreed upon for substantially the same 
services in the same locality in collective bargaining agreements 
entered into by their predecessor contractors (unless such agreed 
compensation is substantially at variance with that locally prevailing 
or the agreement was not negotiated at arm's length). The Secretary of 
Labor is to give effect to the provisions of such collective bargaining 
agreements in his wage determinations under section 2 of the Act. A new 
paragraph (5) added to section 2(a) of the Act requires a statement in 
the government service contract of the rates that would be paid by the 
contracting agency in the event of its direct employment of those 
classes of service employees to be employed on the contract work who, if 
directly employed by the agency, would receive wages determined as 
provided in 5 U.S.C. 5341. The Secretary of Labor is directed to give 
due consideration to such rates in determining prevailing monetary wages 
and fringe benefits under the Act's provisions. Other provisions of the 
1972 amendments include the addition of a new section 10 to the Act to 
insure that wage determinations are issued by the Secretary for 
substantially all service contracts subject to section 2(a) of the Act 
at the earliest administratively feasible time; an amendment to section 
4(b) of the Act to provide, in addition to the conditions previously 
specified for issuance of administrative limitations, variations, 
tolerances, and exemptions (see Sec. 4.123), that administrative action 
in this regard shall be taken only in special circumstances where the 
Secretary determines that it is in accord with the remedial purpose of 
the Act to protect prevailing labor standards; and a new subsection (d) 
added to section 4 of the Act providing for the award of service 
contracts for terms not more than 5 years with provision for periodic 
adjustment of minimum wage rates and fringe benefits payable thereunder 
by the issuance of wage determinations by the Secretary of Labor during 
the term of the contract. A further amendment to section 5(a) of the Act 
requires the names of contractors found to have violated the Act to be 
submitted for

[[Page 61]]

the debarment list (see Sec. 4.188) not later than 90 days after the 
hearing examiner's finding of violation unless the Secretary recommends 
relief, and provides that such recommendations shall be made only 
because of unusual circumstances.
    (b) The provisions of the Act were amended by Public Law 93-57, 87 
Stat. 140, effective July 6, 1973, to extend the Act's coverage to 
Canton Island.
    (c) The provisions of the Act were amended by Public Law 94-489, 90 
Stat. 2358, approved October 13, 1976, to extend the Act's coverage to 
white collar workers. Accordingly, the minimum wage protection of the 
Act now extends to all workers, both blue collar and white collar, other 
than persons employed in a bona fide executive, administrative, or 
professional capacity as those terms are used in the Fair Labor 
Standards Act and in part 541 of title 29. Public Law 94-489 
accomplished this change by adding to section 2(a)(5) of the Act a 
reference to 5 U.S.C. 5332, which deals with white collar workers, and 
by amending the definition of service contract employee in section 8(b) 
of the Act.
    (d) Included in this part 4 and in parts 6 and 8 of this subtitle 
are provisions to give effect to the amendments mentioned in this 
section.



Sec. 4.106  [Reserved]

                 Agencies Whose Contracts May Be Covered



Sec. 4.107  Federal contracts.

    (a) Section 2(a) of the Act covers contracts (and any bid 
specification therefor) ``entered into by the United States'' and 
section 2(b) applies to contracts entered into ``with the Federal 
Government.'' Within the meaning of these provisions, contracts entered 
into by the United States and contracts with the Federal Government 
include generally all contracts to which any agency or instrumentality 
of the U.S. Government becomes a party pursuant to authority derived 
from the Constitution and laws of the United States. The Act does not 
authorize any distinction in this respect between such agencies and 
instrumentalities on the basis of their inclusion in or independence 
from the executive, legislative, or judicial branches of the Government, 
the fact that they may be corporate in form, or the fact that payment 
for the contract services is not made from appropriated funds. Thus, 
contracts of wholly owned Government corporations, such as the Postal 
Service, and those of nonappropriated fund instrumentalities under the 
jurisdiction of the Armed Forces, or of other Federal agencies, such as 
Federal Reserve Banks, are included among those subject to the general 
coverage of the Act. (Brinks, Inc. v. Board of Governors of the Federal 
Reserve System, 466 F. Supp. 116 (D DC 1979); 43 Atty. Gen. Ops. ___ 
(September 26, 1978).) Contracts with the Federal Government and 
contracts entered into ``by the United States'' within the meaning of 
the Act do not, however, include contracts for services entered into on 
their own behalf by agencies or instrumentalities of other Governments 
within the United States, such as those of the several States and their 
political subdivisions, or of Puerto Rico, the Virgin Islands, Guam, or 
American Samoa.
    (b) Where a Federal agency exercises its contracting authority to 
procure services desired by the Government, the method of procurement 
utilized by the contracting agency is not controlling in determining 
coverage of the contract as one entered into by the United States. Such 
contracts may be entered into by the United States either through a 
direct award by a Federal agency or through the exercise by another 
agency (whether governmental or private) of authority granted to it to 
procure services for or on behalf of a Federal agency. Thus, sometimes 
authority to enter into service contracts of the character described in 
the Act for and on behalf of the Government and on a cost-reimbursable 
basis may be delegated, for the convenience of the contracting agency, 
to a prime contractor which has the responsibility for all work to be 
done in connection with the operation and management of a Federal plant, 
installation, facility, or program, together with the legal authority to 
act as agency for and on behalf of the Government and to obligate 
Government funds in the procurement of all services and supplies 
necessary to

[[Page 62]]

carry out the entire program of operation. The contracts entered into by 
such a prime contractor with secondary contractors for and on behalf of 
the Federal agency pursuant to such delegated authority, which have such 
services as their principal purpose, are deemed to be contracts entered 
into by the United States and contracts with the Federal Government 
within the meaning of the Act. However, service contracts entered into 
by State or local public bodies with purveyors of services are not 
deemed to be entered into by the United States merely because such 
services are paid for with funds of the public body which have been 
received from the Federal Government as a grant under a Federal program. 
For example, a contract entered into by a municipal housing authority 
for tree trimming, tree removal, and landscaping for an urban renewal 
project financed by Federal funds is not a contract entered into by the 
United States and is not covered by the Service Contract Act. Similarly, 
contracts let under the Medicaid program which are financed by 
federally-assisted grants to the States, and contracts which provide for 
insurance benefits to a third party under the Medicare program are not 
subject to the Act.



Sec. 4.108  District of Columbia contracts.

    Section 2(a) of the Act covers contracts (and any bid specification 
therefor) in excess of $2,500 which are ``entered into by the * * * 
District of Columbia.'' The contracts of all agencies and 
instrumentalities which procure contract services for or on behalf of 
the District or under the authority of the District Government are 
contracts entered into by the District of Columbia within the meaning of 
this provision. Such contracts are also considered contracts entered 
into with the Federal Government or the United States within the meaning 
of section 2(b), section 5, and the other provisions of the Act. The 
legislative history indicates no intent to distinguish District of 
Columbia contracts from the other contracts made subject to the Act, and 
traditionally, under other statutes, District Government contracts have 
been made subject to the same labor standards provisions as contracts of 
agencies and instrumentalities of the United States.

[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983]



Sec. 4.109  [Reserved]

                       Covered Contracts Generally



Sec. 4.110  What contracts are covered.

    The Act covers service contracts of the Federal agencies described 
in Secs. 4.107-4.108. Except as otherwise specifically provided (see 
Secs. 4.115 et seq.), all such contracts, the principal purpose of which 
is to furnish services in the United States through the use of service 
employees, are subject to its terms. This is true of contracts entered 
into by such agencies with States or their political subdivisions, as 
well as such contracts entered into with private employers. Contracts 
between a Federal or District of Columbia agency and another such agency 
are not within the purview of the Act; however, ``subcontracts'' awarded 
under ``prime contracts'' between the Small Business Administration and 
another Federal agency pursuant to various preferential set-aside 
programs, such as the 8(a) program, are covered by the Act. It makes no 
difference in the coverage of a contract whether the contract services 
are procured through negotiation or through advertising for bids. Also, 
the mere fact that an agreement is not reduced to writing does not mean 
that the contract is not within the coverage of the Act. The amount of 
the contract is not determinative of the Act's coverage, although the 
requirements are different for contracts in excess of $2,500 and for 
contracts of a lesser amount. The Act is applicable to the contract if 
the principal purpose of the contract is to furnish services, if such 
services are to be furnished in the United States, and if service 
employees will be used in providing such services. These elements of 
coverage will be discussed separately in the following sections.



Sec. 4.111  Contracts ``to furnish services.''

    (a) ``Principal purpose'' as criterion. Under its terms, the Act 
applies to a ``contract * * * the principal purpose of which is to 
furnish services * * *.'' If

[[Page 63]]

the principal purpose is to provide something other than services of the 
character contemplated by the Act and any such services which may be 
performed are only incidental to the performance of a contract for 
another purpose, the Act does not apply. However, as will be seen by 
examining the illustrative examples of covered contracts in Secs. 4.130 
et seq., no hard and fast rule can be laid down as to the precise 
meaning of the term principal purpose. This remedial Act is intended to 
be applied to a wide variety of contracts, and the Act does not define 
or limit the types of services which may be contracted for under a 
contract the principal purpose of which is to furnish services. Further, 
the nomenclature, type, or particular form of contract used by 
procurement agencies is not determinative of coverage. Whether the 
principal purpose of a particular contract is the furnishing of services 
through the use of service employees is largely a question to be 
determined on the basis of all the facts in each particular case. Even 
where tangible items of substantial value are important elements of the 
subject matter of the contract, the facts may show that they are of 
secondary import to the furnishing of services in the particular case. 
This principle is illustrated by the examples set forth in Sec. 4.131.
    (b) Determining whether a contract is for ``services'', generally. 
Except indirectly through the definition of service employee the Act 
does not define, or limit, the types of services which may be contracted 
for under a contract ``the principal purpose of which is to furnish 
services''. As stated in the congressional committee reports on the 
legislation, the types of service contracts covered by its provisions 
are varied. Among the examples cited are contracts for laundry and dry 
cleaning, for transportation of the mail, for custodial, janitorial, or 
guard service, for packing and crating, for food service, and for 
miscellaneous housekeeping services. Covered contracts for services 
would also include those for other types of services which may be 
performed through the use of the various classes of service employees 
included in the definition in section 8(b) of the Act (see Sec. 4.113). 
Examples of some such contracts are set forth in Secs. 4.130 et seq. In 
determining questions of contract coverage, due regard must be given to 
the apparent legislative intent to include generally as contracts for 
services those contracts which have as their principal purpose the 
procurement of something other than the construction activity described 
in the Davis-Bacon Act or the materials, supplies, articles, and 
equipment described in the Walsh-Healey Act. The Committee reports in 
both the House and Senate, and statements made on the floor of the 
House, took note of the labor standards protections afforded by these 
two Acts to employees engaged in the performance of construction and 
supply contracts and observed: ``The service contract is now the only 
remaining category of Federal contracts to which no labor standards 
protections apply'' (H. Rept. 948, 89th Cong., 1st Sess., p. 1; see also 
S. Rept. 798, 89th Cong., 1st Sess., p. 1; daily Congressional Record, 
Sept. 20, 1965, p. 23497). A similar understanding of contracts 
principally for services as embracing contracts other than those for 
construction or supplies is reflected in the statement of President 
Johnson upon signing the Act (1 Weekly Compilation of Presidential 
Documents, p. 428).



Sec. 4.112  Contracts to furnish services ``in the United States.''

    (a) The Act and the provisions of this part apply to contract 
services furnished ``in the United States,'' including any State of the 
United States, the District of Columbia, Puerto Rico, the Virgin 
Islands, Outer Continental Shelf lands as defined in the Outer 
Continental Shelf Lands Act, American Samoa, Guam, the Commonwealth of 
the Northern Mariana Islands, Wake Island, and Johnston Island. The 
definition expressly excludes any other territory under the jurisdiction 
of the United States and any United States base or possession within a 
foreign country. Services to be performed exclusively on a vessel 
operating in international waters outside the geographic areas named in 
this paragraph would not be services furnished ``in the United States'' 
within the meaning of the Act.

[[Page 64]]

    (b) A service contract to be performed in its entirety outside the 
geographical limits of the United States as thus defined is not covered 
and is not subject to the labor standards of the Act. However, if a 
service contract is to be performed in part within and in part outside 
these geographic limits, the stipulations required by Sec. 4.6 or 
Sec. 4.7, as appropriate, must be included in the invitation for bids or 
negotiation documents and in the contract, and the labor standards must 
be observed with respect to that part of the contract services that is 
performed within these geographic limits. In such a case the 
requirements of the Act and of the contract clauses will not be 
applicable to the services furnished outside the United States.

[61 FR 68664, Dec. 30, 1996]



Sec. 4.113  Contracts to furnish services ``through the use of 
service employees.''

    (a) Use of ``service employees'' in a contract performance. (1) As 
indicated in Sec. 4.110, the Act covers service contracts only where 
``service employees'' will be used in performing the services which it 
is the purpose of the contract to procure. A contract principally for 
services ordinarily will meet this condition if any of the services will 
be furnished through the use of any service employee or employees. Where 
it is contemplated that the services (of the kind performed by service 
employees) will be performed individually by the contractor, and the 
contracting officer knows when advertising for bids or concluding 
negotiations that service employees will in no event be used by the 
contractor in providing the contract services, the Act will not be 
deemed applicable to the contract and the contract clauses required by 
Sec. 4.6 or Sec. 4.7 may be omitted. The fact that the required services 
will be performed by municipal employees or employees of a State would 
not remove the contract from the purview of the Act, as this Act does 
not contain any exemption for contracts performed by such employees. 
Also, as discussed in paragraph (a)(3) of this section, where the 
services the Government wants under the contract are of a type that will 
require the use of service employees as defined in section 8(b) of the 
Act, the contract is not taken out of the purview of the Act by the fact 
that the manner in which the services of such employees are performed 
will be subject to the continuing overall supervision of bona fide 
executive, administrative, or professional personnel to whom the Act 
does not apply.
    (2) The coverage of the Act does not extend to contracts for 
services to be performed exclusively by persons who are not service 
employees, i.e., persons who are bona fide executive, administrative or 
professional personnel as defined in part 541 of this title (see 
paragraph (b) of this section). A contract for medical services 
furnished by professional personnel is an example of such a contract.
    (3) In addition, the Department does not require application of the 
Act to any contract for services which is performed essentially by bona 
fide executive, administrative, or professional employees, with the use 
of service employees being only a minor factor in the performance of the 
contract. However, the Act would apply to a contract for services which 
may involve the use of service employees to a significant or substantial 
extent even though there is some use of bona fide executive, 
administrative, or professional employees in the performance of the 
contract. For example, contracts for drafting or data processing 
services are often performed by drafters, computer operators, or other 
service employees and are subject to the Act even though the work of 
such employees may be performed under the direction and supervision of 
bona fide professional employees.
    (4) In close cases involving a decision as to whether a contract 
will involve a significant use of service employees, the Department of 
Labor should be consulted, since such situations require consideration 
of other factors such as the nature of the contract work, the type of 
work performed by service employees, how necessary the work is to 
contract performance, the amount of contract work performed by service 
employees vis-a-vis professional employees, and the total number of 
service employees employed on the contract.

[[Page 65]]

    (b) ``Service employees'' defined. In determining whether or not any 
of the contract services will be performed by service employees, the 
definition of service employee in section 8(b) of the Act is 
controlling. It provides:

    The term service employee means any person engaged in the 
performance of a contract entered into by the United States and not 
exempted under section 7, whether negotiated or advertised, the 
principal purpose of which is to furnish services in the United States 
(other than any person employed in a bona fide executive, 
administrative, or professional capacity, as those terms are defined in 
part 541 of title 29, Code of Federal Regulations, as of July 30, 1976, 
and any subsequent revision of those regulations); and shall include all 
such persons regardless of any contractual relationship that may be 
alleged to exist between a contractor or subcontractor and such persons.
It will be noted that the definition expressly excludes those employees 
who are employed in a bona fide executive, administrative, or 
professional capacity as defined in part 541 of this title and as 
discussed further in Sec. 4.156. Some of the specific types of service 
employees who may be employed on service contracts are noted in other 
sections which discuss the application of the Act to employees.

[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983]



Sec. 4.114  Subcontracts.

    (a) ``Contractor'' as including ``subcontractor.'' Except where 
otherwise noted or where the term Government prime contractor is used, 
the term contractor as used in this part 4 shall be deemed to include a 
subcontractor. The term contractor as used in the contract clauses 
required by subpart A in any subcontract under a covered contract shall 
be deemed to refer to the subcontractor, or, if in a subcontract entered 
into by such a subcontractor, shall be deemed to refer to the lower 
level subcontractor. (See Sec. 4.1a(f).)
    (b) Liability of prime contractor. When a contractor undertakes a 
contract subject to the Act, the contractor agrees to assume the 
obligation that the Act's labor standards will be observed in furnishing 
the required services. This obligation may not be relieved by shifting 
all or part of the work to another, and the prime contractor is jointly 
and severally liable with any subcontractor for any underpayments on the 
part of a subcontractor which would constitute a violation of the prime 
contract. The prime contractor is required to include the prescribed 
contract clauses (Secs. 4.6-4.7) and applicable wage determination in 
all subcontracts. The appropriate enforcement sanctions provided under 
the Act may be invoked against both the prime contractor and the 
subcontractor in the event of failure to comply with any of the Act's 
requirements where appropriate under the circumstances of the case.

                           Specific Exclusions



Sec. 4.115  Exemptions and exceptions, generally.

    (a) The Act, in section 7, specifically excludes from its coverage 
certain contracts and work which might otherwise come within its terms 
as procurements the principal purpose of which is to furnish services 
through the use of service employees.
    (b) The statutory exemptions in section 7 of the Act are as follows:
    (1) Any contract of the United States or District of Columbia for 
construction, alteration, and/or repair, including painting and 
decorating of public buildings or public works;
    (2) Any work required to be done in accordance with the provisions 
of the Walsh-Healey Public Contracts Act (49 Stat. 2036);
    (3) Any contract for the carriage of freight or personnel by vessel, 
airplane, bus, truck, express, railway line, or oil or gas pipeline 
where published tariff rates are in effect;
    (4) Any contract for the furnishing of services by radio, telephone, 
telegraph, or cable companies, subject to the Communications Act of 
1934;
    (5) Any contract for public utility services, including electric 
light and power, water, steam, and gas;
    (6) Any employment contract providing for direct services to a 
Federal agency by an individual or individuals;
    (7) Any contract with the Post Office Department, (now the U.S. 
Postal Service) the principal purpose of which is the operation of 
postal contract stations.

[[Page 66]]



Sec. 4.116  Contracts for construction activity.

    (a) General scope of exemption. The Act, in paragraph (1) of section 
7, exempts from its provisions ``any contract of the United States or 
District of Columbia for construction, alteration and/or repair, 
including painting and decorating of public buildings or public works.'' 
This language corresponds to the language used in the Davis-Bacon Act to 
describe its coverage (40 U.S.C. 276a). The legislative history of the 
McNamara-O'Hara Service Contract Act indicates that the purpose of the 
provision is to avoid overlapping coverage of the two acts by excluding 
from the application of the McNamara-O'Hara Act those contracts to which 
the Davis-Bacon Act is applicable and in the performance of which the 
labor standards of that Act are intended to govern the compensation 
payable to the employees of contractors and subcontractors on the work. 
(See H. Rept. 798, pp. 2, 5, and H. Rept. 948, pp. 1, 5, also Hearing, 
Special Subcommittee on Labor, House Committee on Education and Labor, 
p. 9 (89th Cong., 1st sess.).) The intent of section 7(1) is simply to 
exclude from the provisions of the Act those construction contracts 
which involve the employment of persons whose wage rates and fringe 
benefits are determinable under the Davis-Bacon Act.
    (b) Contracts not within exemption. Section 7(1) does not exempt 
contracts which, for purposes of the Davis-Bacon Act, are not considered 
to be of the character described by the corresponding language in that 
Act, and to which the provisions of the Davis-Bacon Act are therefore 
not applied. Such contracts are accordingly subject to the McNamara-
O'Hara Act where their principal purpose is to furnish services in the 
United States through the use of service employees. For example, a 
contract for clearing timber or brush from land or for the demolition or 
dismantling of buildings or other structures located thereon may be a 
contract for construction activity subject to the Davis-Bacon Act where 
it appears that the clearing of the site is to be followed by the 
construction of a public building or public work at the same location. 
If, however, no further construction activity at the site is 
contemplated the Davis-Bacon Act is considered inapplicable to such 
clearing, demolition, or dismantling work. In such event, the exemption 
in section 7(1) of the McNamara-O'Hara Act has no application and the 
contract may be subject to the Act in accordance with its general 
coverage provisions. It should be noted that the fact that a contract 
may be labeled as one for the sale and removal of property, such as 
salvage material, does not negate coverage under the Act even though 
title to the removable property passes to the contractor. While the 
value of the property being sold in relation to the services performed 
under the contract is a factor to be considered in determining coverage, 
where the facts show that the principal purpose of removal, dismantling, 
and demolition contracts is to furnish services through the use of 
service employees, these contracts are subject to the Act. (See also 
Sec. 4.131.)
    (c) Partially exempt contracts. (1) Instances may arise in which, 
for the convenience of the Government, instead of awarding separate 
contracts for construction work subject to the Davis-Bacon Act and for 
services of a different type to be performed by service employees, the 
contracting officer may include separate specifications for each type of 
work in a single contract calling for the performance of both types of 
work. For example, a contracting agency may invite bids for the 
installation of a plumbing system or for the installation of a security 
alarm system in a public building and for the maintenance of the system 
for one year. In such a case, if the contract is principally for 
services, the exemption provided by section 7(1) will be deemed 
applicable only to that portion of the contract which calls for 
construction activity subject to the Davis-Bacon Act. The contract 
documents are required to contain the clauses prescribed by Sec. 4.6 for 
application to the contract obligation to furnish services through the 
use of service employees, and the provisions of the McNamara-O'Hara Act 
will apply to that portion of the contract.
    (2) Service or maintenance contracts involving construction work. 
The provisions of both the Davis-Bacon Act and

[[Page 67]]

the Service Contract Act would generally apply to contracts involving 
construction and service work where such contracts are principally for 
services. The Davis-Bacon Act, and thus the exemption provided by 
section 7(1) of the Act, would be applicable to construction contract 
work in such hybrid contracts where:
    (i) The contract contains specific requirements for substantial 
amounts of construction, reconstruction, alteration, or repair work 
(hereinafter referred to as construction) or it is ascertainable that a 
substantial amount of construction work will be necessary for the 
performance of the contract (the word ``substantial'' relates to the 
type and quantity of construction work to be performed and not merely to 
the total value of construction work (whether in absolute dollars or 
cost percentages) as compared to the total value of the contract); and
    (ii) The construction work is physically or functionally separate 
from, and as a practical matter is capable of being performed on a 
segregated basis from, the other work called for by the contract.

[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983]



Sec. 4.117  Work subject to requirements of Walsh-Healey Act.

    (a) The Act, in paragraph (2) of section 7, exempts from its 
provisions ``any work required to be done in accordance with the 
provision of the Walsh-Healey Public Contracts Act'' (49 Stat. 2036, 41 
U.S.C. 35 et seq.). It will be noted that like the similar provision in 
the Contract Work Hours and Safety Standards Act (40 U.S.C. 329(b)), 
this is an exemption for ``work'', i.e., specifications or requirements, 
rather than for ``contracts'' subject to the Walsh-Healey Act. The 
purpose of the exemption was to eliminate possible overlapping of the 
differing labor standards of the two Acts, which otherwise might be 
applied to employees performing work on a contract covered by the 
Service Contract Act if such contract and their work under it should 
also be deemed to be covered by the Walsh-Healey Act. The Walsh-Healey 
Act applies to contracts in excess of $10,000 for the manufacture or 
furnishing of materials, supplies, articles or equipment. Thus, there is 
no overlap if the principal purpose of the contract is the manufacture 
or furnishing of such materials etc., rather than the furnishing of 
services of the character referred to in the Service Contract Act, for 
such a contract is not within the general coverage of the Service 
Contract Act. In such cases the exemption in section 7(2) is not 
pertinent. See, for example, the discussion in Secs. 4.131 and 4.132.
    (b) Further, contracts principally for remanufacturing of equipment 
which is so extensive as to be equivalent to manufacturing are subject 
to the Walsh-Healey Act. Remanufacturing shall be deemed to be 
manufacturing when the criteria in paragraph (b)(1) or (2) of this 
section are met.
    (1) Major overhaul of an item, piece of equipment, or materiel which 
is degraded or inoperable, and under which all of the following 
conditions exist:
    (i) The item or equipment is required to be completely or 
substantially torn down into individual components parts; and
    (ii) Substantially all of the parts are reworked, rehabilitated, 
altered and/or replaced; and
    (iii) The parts are reassembled so as to furnish a totally rebuilt 
item or piece of equipment; and
    (iv) Manufacturing processes similar to those which were used in the 
manufacturing of the item or piece of equipment are utilized; and
    (v) The disassembled componets, if usable (except for situations 
where the number of items or pieces of equipment involved are too few to 
make it practicable) are commingled with existing inventory and, as 
such, lose their identification with respect to a particular piece of 
equipment; and
    (vi) The items or equipment overhauled are restored to original life 
expectancy, or nearly so; and
    (vii) Such work is performed in a facility owned or operated by the 
contractor.
    (2) Major modification of an item, piece of equipment, or materiel 
which is wholly or partially obsolete, and under which all of the 
following conditions exist:

[[Page 68]]

    (i) The item or equipment is required to be completely or 
substantially torn down; and
    (ii) Outmoded parts are replaced; and
    (iii) The item or equipment is rebuilt or reassembled; and
    (iv) The contract work results in the furnishing of a substantially 
modified item in a usable and serviceable condition; and
    (v) The work is performed in a facility owned or operated by the 
contractor.
    (3) Remanufacturing does not include the repair of damaged or broken 
equipment which does not require a complete teardown, overhaul, and 
rebuild as described in paragraphs (b)(1) and (2) of this section, or 
the periodic and routine maintenance, preservation, care, adjustment, 
upkeep, or servicing of equipment to keep it in usable, serviceable, 
working order. Such contracts typically are billed on an hourly rate 
(labor plus materials and parts) basis. Any contract principally for the 
work described in this paragraph (b)(3) is subject to the Service 
Contract Act. Examples of such work include:
    (i) Repair of an automobile, truck, or other vehicle, construction 
equipment, tractor, crane, aerospace, air conditioning and refrigeration 
equipment, electric motors, and ground powered industrial or vehicular 
equipment;
    (ii) Repair of typewriters and other office equipment (see 
Sec. 4.123(e));
    (iii) Repair of appliances, radios television, calculators, and 
other electronic equipment;
    (iv) Inspecting, testing, calibration, painting, packaging, 
lubrication, tune-up, or replacement of internal parts of equipment 
listed in paragraphs (b)(3)(i), (ii), and (iii) of this section; and
    (v) Reupholstering, reconditioning, repair, and refinishing of 
furniture.
    (4) Application of the Service Contract Act or the Walsh-Healey Act 
to any similar type of contract not decided above will be decided on a 
case-by-case basis by the Administrator.



Sec. 4.118  Contracts for carriage subject to published tariff rates.

    The Act, in paragraph (3) of section 7, exempts from its provisions 
``any contract for the carriage of freight or personnel by vessel, 
airplane, bus, truck, express, railway line or oil or gas pipeline where 
published tariff rates are in effect''. In order for this exemption to 
be applicable, the contract must be for such carriage by a common 
carrier described by the terms used. It does not, for example, apply to 
contracts for taxicab or ambulance service, because taxicab and 
ambulance companies are not among the common carriers specified by the 
statute. Also, a contract for transportation service does not come 
within this exemption unless the service contracted for is actually 
governed by published tariff rates in effect pursuant to State or 
Federal law for such carriage. The contracts excluded from the reach of 
the Act by this exemption are typically those where there is on file 
with the Interstate Commerce Commission or an appropriate State or local 
regulatory body a tariff rate applicable to the transportation involved, 
and the transportation contract between the Government and the carrier 
is evidenced by a Government bill of lading citing the published tariff 
rate. An administrative exemption has been provided for certain 
contracts where such carriage is subject to rates covered by section 
10721 of the Interstate Commerce Act and is in accordance with 
applicable regulations governing such rates. See Sec. 4.123(d). However, 
only contracts principally for the carriage of ``freight or personnel'' 
are exempt. Thus, the exemption cannot apply where the principal purpose 
of the contract is packing, crating, handling, loading, and/or storage 
of goods prior to or following line-haul transportation. The fact that 
substantial local drayage to and from the contractor's establishment 
(such as a warehouse) may be required in such contracts does not alter 
the fact that their principal purpose is other than the carriage of 
freight. Also, this exemption does not exclude any contracts for the 
transportation of mail from the application of the Act, because the term 
freight does not include the mail. (For an administrative exemption of 
certain contracts with common carriers for carriage of mail, see 
Sec. 4.123(d).)

[[Page 69]]



Sec. 4.119  Contracts for services of communications companies.

    The Act, in paragraph (4) of section 7, exempts from its provisions 
``any contract for the furnishing of services by radio, telephone, 
telegraph, or cable companies, subject to the Communications Act of 
1934.'' This exemption is applicable to contracts with such companies 
for communication services regulated under the Communications Act. It 
does not exempt from the Act any contracts with such companies to 
furnish any other kinds of services through the use of service 
employees.



Sec. 4.120  Contracts for public utility services.

    The Act, in paragraph (5) of section 7, exempts from its provisions 
``any contract for public utility services, including electric light and 
power, water, steam, and gas.'' This exemption is applicable to 
contracts for such services with companies whose rates therefor are 
regulated under State, local, or Federal law governing operations of 
public utility enterprises. Contracts entered into with public utility 
companies to furnish services through the use of service employees, 
other than those subject to such rate regulation, are not exempt from 
the Act. Among the contracts included in the exemption would be those 
between Federal electric power marketing agencies and investor-owned 
electric utilities, Rural Electrification Administration cooperatives, 
municipalities and State agencies engaged in the transmission and sale 
of electric power and energy.

(See H. Rept. No. 948, 89th Cong., 1st sess., p. 4)



Sec. 4.121  Contracts for individual services.

    The Act, in paragraph (6) of section 7, exempts from its provisions 
``any employment contract providing for direct services to a Federal 
agency by an individual or individuals.'' This exemption, which applies 
only to an ``employment contract'' for ``direct services,'' makes it 
clear that the Act's application to Federal contracts for services is 
intended to be limited to service contracts entered into with 
independent contractors. If a contract to furnish services (to be 
performed by a service employee as defined in the Act) provides that 
they will be furnished directly to the Federal agency by the individual 
under conditions or circumstances which will make him an employee of the 
agency in providing the contract service, the exemption applies and the 
contract will not be subject to the Act's provisions. The exemption does 
not exclude from the Act any contract for services of the kind performed 
by service employees which is entered into with an independent 
contractor whose individual services will be used in performing the 
contract, but as noted earlier in Sec. 4.113, such a contract would be 
outside the general coverage of the Act if only the contractor's 
individual services would be furnished and no service employee would in 
any event be used in its performance.



Sec. 4.122  Contracts for operation of postal contract stations.

    The Act, in paragraph (7) of section 7, exempts from its provisions 
``any contract with the Post Office Department, [now the U.S. Postal 
Service], the principal purpose of which is the operation of postal 
contract stations.'' The exemption is limited to postal service 
contracts having the operation of such stations as their principal 
purpose. A provision of the legislation which would also have exempted 
contracts with the U.S. Postal Service having as their principal purpose 
the transportation, handling, or delivery of the mails was eliminated 
from the bill during its consideration by the House Committee on 
Education and Labor (H. Rept. 948, 89th Cong., 1st sess., p. 1).



Sec. 4.123  Administrative limitations, variances, tolerances, and exemptions.

    (a) Authority of the Secretary. Section 4(b) of the Act as amended 
in 1972 authorizes the Secretary to ``provide such reasonable 
limitations'' and to ``make such rules and regulations allowing 
reasonable variations, tolerances, and exemptions to and from any or all 
provisions of this Act (other than Sec. 10), but only in special 
circumstances where he determines that such limitation, variation, 
tolerance, or exemption is necessary and proper in the public interest

[[Page 70]]

or to avoid the serious impairment of Government business, and is in 
accord with the remedial purpose of this Act to protect prevailing labor 
standards.'' This authority is similar to that vested in the Secretary 
under section 6 of the Walsh-Healey Public Contracts Act (41 U.S.C. 40) 
and under section 105 of the Contract Work Hours and Safety Standards 
Act (40 U.S.C. 331).
    (b) Administrative action under section 4(b) of the Act. The 
authority conferred on the Secretary by section 4(b) of the Act will be 
exercised with due regard to the remedial purpose of the statute to 
protect prevailing labor standards and to avoid the undercutting of such 
standards which could result from the award of Government work to 
contractors who will not observe such standards, and whose saving in 
labor cost therefrom enables them to offer a lower price to the 
Government than can be offered by the fair employers who maintain the 
prevailing standards. Administrative action consistent with this 
statutory purpose may be taken under section 4(b) with or without a 
request therefor, when found necessary and proper in accordance with the 
statutory standards. No formal procedures have been prescribed for 
requesting such action. However, a request for exemption from the Act's 
provisions will be granted only upon a strong and affirmative showing 
that it is necessary and proper in the public interest or to avoid 
serious impairment of Government business, and is in accord with the 
remedial purpose of the Act to protect prevailing labor standards. If 
the request for administrative action under section 4(b) is not made by 
the headquarters office of the contracting agency to which the contract 
services are to be provided, the views of such office on the matter 
should be obtained and submitted with the request or the contracting 
officer may forward such a request through channels to the agency 
headquarters for submission with the latter's views to the Administrator 
of the Wage and Hour Division, Department of Labor, whenever any wage 
payment issues are involved. Any request relating to an occupational 
safety or health issue shall be submitted to the Assistant Secretary for 
Occupational Safety and Health, Department of Labor.
    (c) Documentation of official action under section 4(b). All papers 
and documents made a part of the official record of administrative 
action pursuant to section 4(b) of the Act are available for public 
inspection in accordance with the regulations in 29 CFR part 70. 
Limitations, variations, tolerances and exemptions of general 
applicability and legal effect promulgated pursuant to such authority 
are published in the Federal Register and made a part of the rules 
incorporated in this part 4. For convenience in use of the rules, they 
are generally set forth in the sections of this part covering the 
subject matter to which they relate. (See, for example, Secs. 4.5(b), 
4.6(o), 4.112 and 4.113.) Any rules that are promulgated under section 
4(b) of the Act relating to subject matter not dealt with elsewhere in 
this part 4 will be set forth immediately following this paragraph.
    (d) In addition to the statutory exemptions in section 7 of the Act 
(see Sec. 4.115(b)), the following types of contracts have been exempted 
from all the provisions of the Service Contract Act of 1965, pursuant to 
section 4(b) of the Act, prior to its amendment by Public Law 92-473, 
which exemptions the Secretary of Labor found to be necessary and proper 
in the public interest or to avoid serious impairment of the conduct of 
Government business:
    (1) Contracts entered into by the United States with common carriers 
for the carriage of mail by rail, air (except air star routes), bus, and 
ocean vessel, where such carriage is performed on regularly scheduled 
runs of the trains, airplanes, buses, and vessels over regularly 
established routes and accounts for an insubstantial portion of the 
revenue therefrom;
    (2) Any contract entered into by the U.S. Postal Service with an 
individual owner-operator for mail service where it is not contemplated 
at the time the contract is made that such owner-operator will hire any 
service employee to perform the services under the contract except for 
short periods of vacation time or for unexpected contingencies or 
emergency situations such as illness, or accident; and

[[Page 71]]

    (3) Contracts for the carriage of freight or personnel where such 
carriage is subject to rates covered by section 10721 of the Interstate 
Commerce Act.
    (e) The following types of contracts have been exempted from all the 
provisions of the Service Contract Act of 1965, pursuant to section 4(b) 
of the Act, which exemptions the Secretary of Labor found are necessary 
and proper in the public interest or to avoid serious impairment of the 
conduct of Government business, and are in accord with the remedial 
purpose of the Act to protect prevailing labor standards:
    (1)(i) Prime contracts or subcontracts principally for the 
maintenance, calibration, and/or repair of:
    (A) Automated data processing equipment and office information/word 
processing systems;
    (B) Scientific equipment and medical apparatus or equipment where 
the application of microelectronic circuitry or other technology of at 
least similar sophistication is an essential element (for example, 
Federal Supply Classification (FSC) Group 65, Class 6515, ``Medical 
Diagnostic Equipment''; Class 6525, ``X-Ray Equipment''; FSC Group 66, 
Class 6630, ``Chemical Analysis Instruments''; Class 6665, 
``Geographical and Astronomical Instruments'', are largely composed of 
the types of equipment exempted under this paragraph);
    (C) Office/business machines not otherwise exempt pursuant to 
paragraph (e)(1)(i)(A) of this section, where such services are 
performed by the manufacturer or supplier of the equipment.
    (ii) The exemptions set forth in this paragraph (e)(1) shall apply 
only under the following circumstances:
    (A) The items of equipment are commercial items which are used 
regularly for other than Government purposes, and are sold or traded by 
the contractor (or subcontractor in the case of an exempt subcontract) 
in substantial quantities to the general public in the course of normal 
business operations;
    (B) The prime contract or subcontract services are furnished at 
prices which are, or are based on, established catalog or market prices 
for the maintenance, calibration, and/or repair of such commercial 
items. An ``established catalog price'' is a price included in a 
catalog, price list, schedule, or other form that is regularly 
maintained by the manufacturer or the contractor, is either published or 
otherwise available for inspection by customers, and states prices at 
which sales currently, or were last, made to a significant number of 
buyers constituting the general public. An ``established market price'' 
is a current price, established in the usual course of trade between 
buyers and sellers free to bargain, which can be substantiated from 
sources independent of the manufacturer or contractor; and
    (C) The contractor utilizes the same compensation (wage and fringe 
benefits) plan for all service employees performing work under the 
contract as the contractor uses for these employees and equivalent 
employees servicing the same equipment of commercial customers;
    (D) The contractor certifies to the provisions in this paragraph 
(e)(1)(ii). Certification by the prime contractor as to its compliance 
with respect to the prime contract also constitutes its certification as 
to compliance by its subcontractor if it subcontracts out the exempt 
services. The certification shall be included in the prime contract or 
subcontract.
    (iii)(A) Determinations of the applicability of this exemption to 
prime contracts shall be made in the first instance by the contracting 
officer on or before contract award. In making a judgment that the 
exemption applies, the contracting officer shall consider all factors 
and make an affirmative determination that all of the conditions in 
paragraph (e)(1) of this section have been met.
    (B) Determinations of the applicability of this exemption to 
subcontracts shall be made by the prime contractor on or before 
subcontract award. In making a judgment that the exemption applies, the 
prime contractor shall consider all factors and make an affirmative 
determination that all of the conditions in paragraph (e)(1) have been 
met.
    (iv)(A) If the Administrator determines after award of the prime 
contract that any of the requirements in

[[Page 72]]

paragraph (e)(1) of this section for exemption has not been met, the 
exemption will be deemed inapplicable, and the contract shall become 
subject to the Service Contract Act, effective as of the date of the 
Administrator's determination. In such case, the corrective procedures 
in Sec. 4.5(c) shall be followed.
    (B) The prime contractor is responsible for compliance with the 
requirements of the Service Contract Act by its subcontractors, 
including compliance with all of the requirements of this exemption (see 
Sec. 4.114(b)). If the Administrator determines that any of the 
requirements in paragraph (e)(1) for exemption has not been met with 
respect to a subcontract, the exemption will be deemed inapplicable, and 
the prime contractor may be responsible for compliance with the Act 
effective as of the date of contract award.
    (2)(i) Prime contracts or subcontracts principally for the following 
services where the services under the contract or subcontract meet all 
of the criteria set forth in paragraph (e)(2)(ii) of this section and 
are not excluded by paragraph (e)(2)(iii):
    (A) Automobile or other vehicle (e.g., aircraft) maintenance 
services (other than contracts to operate a Government motor pool or 
similar facility);
    (B) Financial services involving the issuance and servicing of cards 
(including credit cards, debit cards, purchase cards, smart cards, and 
similar card services);
    (C) Contracts with hotels/motels for conferences, including lodging 
and/or meals which are part of the contract for the conference (which 
shall not include ongoing contracts for lodging on an as needed or 
continuing basis);
    (D) Maintenance, calibration, repair and/or installation (where the 
installation is not subject to the Davis-Bacon Act, as provided in 
Sec. 4.116(c)(2)) services for all types of equipment where the services 
are obtained from the manufacturer or supplier of the equipment under a 
contract awarded on a sole source basis;
    (E) Transportation by common carrier of persons by air, motor 
vehicle, rail, or marine vessel on regularly scheduled routes or via 
standard commercial services (not including charter services);
    (F) Real estate services, including real property appraisal 
services, related to housing federal agencies or disposing of real 
property owned by the Federal Government; and
    (G) Relocation services, including services of real estate brokers 
and appraisers, to assist federal employees or military personnel in 
buying and selling homes (which shall not include actual moving or 
storage of household goods and related services).
    (ii) The exemption set forth in this paragraph (e)(2) shall apply to 
the services listed in paragraph (e)(2)(i) only when all of the 
following criteria are met:
    (A) The services under the prime contract or subcontract are 
commercial--i.e., they are offered and sold regularly to non-
Governmental customers, and are provided by the contractor (or 
subcontractor in the case of an exempt subcontract) to the general 
public in substantial quantities in the course of normal business 
operations.
    (B) The prime contract or subcontract will be awarded on a sole 
source basis or the contractor or subcontractor will be selected for 
award on the basis of other factors in addition to price. In such cases, 
price must be equal to or less important than the combination of other 
non-price or cost factors in selecting the contractor.
    (C) The prime contract or subcontract services are furnished at 
prices which are, or are based on, established catalog or market prices. 
An established price is a price included in a catalog, price list, 
schedule, or other form that is regularly maintained by the contractor 
or subcontractor, is either published or otherwise available for 
inspection by customers, and states prices at which sales are currently, 
or were last, made to a significant number of buyers constituting the 
general public. An established market price is a current price, 
established in the usual course of trade between buyers and sellers free 
to bargain, which can be substantiated from sources independent of the 
manufacturer or contractor.
    (D) Each service employee who will perform services under the 
Government

[[Page 73]]

contract or subcontract will spend only a small portion of his or her 
time (a monthly average of less than 20 percent of the available hours 
on an annualized basis, or less than 20 percent of available hours 
during the contract period if the contract period is less than a month) 
servicing the government contract or subcontract.
    (E) The contractor utilizes the same compensation (wage and fringe 
benefits) plan for all service employees performing work under the 
contract or subcontract as the contractor uses for these employees and 
for equivalent employees servicing commercial customers.
    (F) The contracting officer (or prime contractor with respect to a 
subcontract) determines in advance, based on the nature of the contract 
requirements and knowledge of the practices of likely offerors, that all 
or nearly all offerors will meet the requirements in paragraph 
(e)(2)(ii) of this section. Where the services are currently being 
performed under contract, the contracting officer or prime contractor 
shall consider the practices of the existing contractor in making a 
determination regarding the requirements in paragraph (e)(2)(ii). If 
upon receipt of offers, the contracting officer finds that he or she did 
not correctly determine that all or nearly all offerors would meet the 
requirements, the Service Contract Act shall apply to the procurement, 
even if the successful offeror has certified in accordance with 
paragraph (e)(2)(ii)(G) of this section.
    (G) The contractor certifies in the prime contract or subcontract, 
as applicable, to the provisions in paragraph (e)(2)(ii)(A) and (C) 
through (E) of this section. Certification by the prime contractor as to 
its compliance with respect to the prime contract also constitutes its 
certification as to compliance by its subcontractor if it subcontracts 
out the exempt services. If the contracting officer or prime contractor 
has reason to doubt the validity of the certification, SCA stipulations 
shall be included in the prime contract or subcontract.
    (iii)(A) If the Administrator determines after award of the prime 
contract that any of the requirements in paragraph (e)(2) of this 
section for exemption has not been met, the exemption will be deemed 
inapplicable, and the contract shall become subject to the Service 
Contract Act. In such case, the corrective procedures in Sec. 4.5(c) 
shall be followed.
    (B) The prime contractor is responsible for compliance with the 
requirements of the Service Contract Act by its subcontractors, 
including compliance with all of the requirements of this exemption (see 
Sec. 4.114(b)). If the Department of Labor determines that any of the 
requirements in paragraph (e)(2) for exemption has not been met with 
respect to a subcontract, the exemption will be deemed inapplicable, and 
the prime contractor may be responsible for compliance with the Act, as 
of the date of contract award.
    (iv) The exemption set forth in this paragraph (e)(2) does not apply 
to solicitations and contracts:
    (A) Entered into under the Javits-Wagner-O'Day Act, 41 U.S.C. 47;
    (B) For the operation of a Government facility or portion thereof 
(but may be applicable to subcontracts for services set forth in 
paragraph (e)(2)(ii) that meet all of the criteria of paragraph 
(e)(2)(ii)); or
    (C) Subject to section 4(c) of the Service Contract Act, as well as 
any options or extensions under such contract.

[48 FR 49762, Oct. 27, 1983, as amended 66 FR 5134, Jan. 18, 2001; 70 FR 
50899, Aug. 26, 2005]



Secs. 4.124-4.129  [Reserved]

         Particular Application of Contract Coverage Principles



Sec. 4.130  Types of covered service contracts illustrated.

    (a) The types of contracts, the principal purpose of which is to 
furnish services through the use of service employees, are too numerous 
and varied to permit an exhaustive listing. The following list is 
illustrative, however, of the types of services called for by such 
contracts that have been found to come within the coverage of the Act. 
Other examples of covered contracts are discussed in other sections of 
this subpart.
    (1) Aerial spraying.

[[Page 74]]

    (2) Aerial reconnaissance for fire detection.
    (3) Ambulance service.
    (4) Barber and beauty shop services.
    (5) Cafeteria and food service.
    (6) Carpet laying (other than part of construction) and cleaning.
    (7) Cataloging services.
    (8) Chemical testing and analysis.
    (9) Clothing alteration and repair.
    (10) Computer services.
    (11) Concessionaire services.
    (12) Custodial, janitorial, and housekeeping services.
    (13) Data collection, processing, and/or analysis services.
    (14) Drafting and illustrating.
    (15) Electronic equipment maintenance and operation and engineering 
support services.
    (16) Exploratory drilling (other than part of construction).
    (17) Film processing.
    (18) Fire fighting and protection.
    (19) Fueling services.
    (20) Furniture repair and rehabilitation.
    (21) Geological field surveys and testing.
    (22) Grounds maintenance.
    (23) Guard and watchman security service.
    (24) Inventory services.
    (25) Keypunching and keyverifying contracts.
    (26) Laboratory analysis services.
    (27) Landscaping (other than part of construction).
    (28) Laundry and dry cleaning.
    (29) Linen supply services.
    (30) Lodging and/or meals.
    (31) Mail hauling.
    (32) Mailing and addressing services.
    (33) Maintenance and repair of all types of equipment, e.g., 
aircraft, engines, electrical motors, vehicles, and electronic, 
telecommunications, office and related business, and construction 
equipment (See Sec. 4.123(e).).
    (34) Mess attendant services.
    (35) Mortuary services.
    (36) Motor pool operation.
    (37) Nursing home services.
    (38) Operation, maintenance, or logistic support of a Federal 
facility.
    (39) Packing and crating.
    (40) Parking services.
    (41) Pest control.
    (42) Property management.
    (43) Snow removal.
    (44) Stenographic reporting.
    (45) Support services at military installations.
    (46) Surveying and mapping services (not directly related to 
construction).
    (47) Taxicab services.
    (48) Telephone and field interview services.
    (49) Tire and tube repairs.
    (50) Transporting property or personnel (except as explained in 
Sec. 4.118).
    (51) Trash and garbage removal.
    (52) Tree planting and thinning, clearing timber or brush, etc. (See 
also Secs. 4.116(b) and 4.131(f).).
    (53) Vending machine services.
    (54) Visual and graphic arts.
    (55) Warehousing or storage.



Sec. 4.131  Furnishing services involving more than use of labor.

    (a) If the principal purpose of a contract is to furnish services in 
the performance of which service employees will be used, the Act will 
apply to the contract, in the absence of an exemption, even though the 
use or furnishing of nonlabor items may be an important element in the 
furnishing of the services called for by its terms. The Act is concerned 
with protecting the labor standards of workers engaged in performing 
such contracts, and is applicable if the statutory coverage test is met, 
regardless of the form in which the contract is drafted. The proportion 
of the labor cost to the total cost of the contract and the necessity of 
furnishing or receiving tangible nonlabor items in performing the 
contract obligations will be considered but are not necessarily 
determinative. A procurement that requires tangible items to be supplied 
to the Government or the contractor as a part of the service furnished 
is covered by the Act so long as the facts show that the contract is 
chiefly for services, and that the furnishing of tangible items is of 
secondary importance.
    (b) Some examples of covered contracts illustrating these principles 
may be helpful. One such example is a contract for the maintenance and 
repair of typewriters. Such a contract may require the contractor to 
furnish typewriter parts, as the need arises, in performing the contract 
services. Since

[[Page 75]]

this does not change the principal purpose of the contract, which is to 
furnish the maintenance and repair services through the use of service 
employees, the contract remains subject to the Act.
    (c) Another example of the application of the above principle is a 
contract for the recurrent supply to a Government agency of freshly 
laundered items on a rental basis. It is plain from the legislative 
history that such a contract is typical of those intended to be covered 
by the Act. S. Rept. 798, 89th Cong., 1st Sess., p. 2; H. Rept. 948, 
89th Cong., 1st Sess., p. 2. Although tangible items owned by the 
contractor are provided on a rental basis for the use of the Government, 
the service furnished by the contractor in making them available for 
such use when and where they are needed, through the use of service 
employees who launder and deliver them, is the principal purpose of the 
contract.
    (d) Similarly, a contract in the form of rental of equipment with 
operators for the plowing and reseeding of a park area is a service 
contract. The Act applies to it because its principal purpose is the 
service of plowing and reseeding, which will be performed by service 
employees, although as a necessary incident the contractor is required 
to furnish equipment. For like reasons the contracts for aerial spraying 
and aerial reconnaissance listed in Sec. 4.130 are covered, even though 
the use of airplanes, an expensive item of equipment, is essential in 
performing such services. In general, contracts under which the 
contractor agrees to provide the Government with vehicles or equipment 
on a rental basis with drivers or operators for the purpose of 
furnishing services are covered by the Act. Such contracts are not 
considered contracts for furnishing equipment within the meaning of the 
Walsh-Healey Public Contracts Act. On the other hand, contracts under 
which the contractor provides equipment with operators for the purpose 
of construction of a public building or public work, such as road 
resurfacing or dike repair, even where the work is performed under the 
supervision of Government employees, would be within the exemption in 
section 7(1) of the Act as contracts for construction subject to the 
Davis-Bacon Act. (See Sec. 4.116.)
    (e) Contracts for data collection, surveys, computer services, and 
the like are within the general coverage of the Act even though the 
contractor may be required to furnish such tangible items as written 
reports or computer printouts, since items of this nature are considered 
to be of secondary importance to the services which it is the principal 
purpose of the contract to procure.
    (f) Contracts under which the contractor receives tangible items 
from the Government in return for furnishing services (which items are 
in lieu of or in addition to monetary consideration granted by either 
party) are covered by the Act where the facts show that the furnishing 
of such services is the principal purpose of the contracts. For example, 
property removal or disposal contracts which involve demolition of 
buildings or other structures are subject to the Act when their 
principal purpose is dismantling and removal (and no further 
construction activity at the site is contemplated). However, removal or 
dismantling contracts whose principal purpose is sales are not covered. 
So-called ``timber sales'' contracts generally are not subject to the 
Act because normally the services provided under such contracts are 
incidental to the principal purpose of the contracts. (See also 
Secs. 4.111(a) and 4.116(b).)



Sec. 4.132  Services and other items to be furnished under a 
single contract.

    If the principal purpose of a contract is to furnish services 
through the use of service employees within the meaning of the Act, the 
contract to furnish such services is not removed from the Act's coverage 
merely because, as a matter of convenience in procurement, the service 
specifications are combined in a single contract document with 
specifications for the procurement of different or unrelated items. In 
such case, the Act would apply to service specifications but would not 
apply to any specifications subject to the Walsh-Healey Act or to the 
Davis-Bacon Act. With respect to contracts which contain separate 
specifications

[[Page 76]]

for the furnishing of services and construction activity, see 
Sec. 4.116(c).



Sec. 4.133  Beneficiary of contract services.

    (a) The Act does not say to whom the services under a covered 
contract must be furnished. So far as its language is concerned, it is 
enough if the contract is ``entered into'' by and with the Government 
and if its principal purpose is ``to furnish services in the United 
States through the use of service employees''. It is clear that Congress 
intended to cover at least contracts for services of direct benefit to 
the Government, its property, or its civilian or military personnel for 
whose needs it is necessary or desirable for the Government to make 
provision for such services. For example, the legislative history makes 
specific reference to such contracts as those for furnishing food 
service and laundry and dry cleaning service for personnel at military 
installations. Furthermore, there is no limitation in the Act regarding 
the beneficiary of the services, nor is there any indication that only 
contracts for services of direct benefit to the Government, as 
distinguished from the general public, are subject to the Act. 
Therefore, where the principal purpose of the Government contract is to 
provide services through the use of service employees, the contract is 
covered by the Act, regardless of the direct beneficiary of the services 
or the source of the funds from which the contractor is paid for the 
service, and irrespective of whether the contractor performs the work in 
its own establishment, on a Government installation, or elsewhere. The 
fact that the contract requires or permits the contractor to provide the 
services directly to individual personnel as a concessionaire, rather 
than through the contracting agency, does not negate coverage by the 
Act.
    (b) The Department of Labor, pursuant to section 4(b) of the Act, 
exempts from the provisions of the Act certain kinds of concession 
contracts providing services to the general public, as provided herein. 
Specifically, concession contracts (such as those entered into by the 
National Park Service) principally for the furnishing of food, lodging, 
automobile fuel, souvenirs, newspaper stands, and recreational equipment 
to the general public, as distinguished from the United States 
Government or its personnel, are exempt. This exemption is necessary and 
proper in the public interest and is in accord with the remedial purpose 
of the Act. Where concession contracts, however, include substantial 
requirements for services other than those stated, those services are 
not exempt. The exemption provided does not affect a concession 
contractor's obligation to comply with the labor standards provisions of 
any other statutes such as the Contract Work Hours and Safety Standards 
Act (40 U.S.C. 327 et seq.), the Davis-Bacon Act (40 U.S.C. 276a et 
seq.; see part 5 of this title) and the Fair Labor Standards Act (29 
U.S.C. 201 et seq.).



Sec. 4.134  Contracts outside the Act's coverage.

    (a) Contracts entered into by agencies other than those of the 
Federal Government or the District of Columbia as described in 
Secs. 4.107-4.108 are not within the purview of the Act. Thus, the Act 
does not cover service contracts entered into with any agencies of 
Puerto Rico, the Virgin Islands, American Samoa, or Guam acting in 
behalf of their respective local governments. Similarly, it does not 
cover service contracts entered into by agencies of States or local 
public bodies, not acting as agents for or on behalf of the United 
States or the District of Columbia, even though Federal financial 
assistance may be provided for such contracts under Federal law or the 
terms and conditions specified in Federal law may govern the award and 
operation of the contract.
    (b) Further, as already noted in Secs. 4.111 through 4.113, the Act 
does not apply to Government contracts which do not have as their 
principal purpose the furnishing of services, or which call for no 
services to be furnished within the United States or through the use of 
service employees as those terms are defined in the Act. Clearly outside 
the Act's coverage for these reasons are such contracts as those for the 
purchase of tangible products which the Government needs (e.g. vehicles, 
office

[[Page 77]]

equipment, and supplies), for the logistic support of an air base in a 
foreign country, or for the services of a lawyer to examine the title to 
land. Similarly, where the Government contracts for a lease of building 
space for Government occupancy and the building owner furnishes general 
janitorial and other building services on an incidental basis through 
the use of service employees, the leasing of the space rather than the 
furnishing of the building services is the principal purpose of the 
contract, and the Act does not apply. Another type of contract which is 
outside the coverage of the Act because it is not for the principal 
purpose of furnishing services may be illustrated by a contract for the 
rental of parking space under which the Government agency is simply 
given a lease or license to use the contractor's real property. Such a 
contract is to be distinguished from contracts for the storage of 
vehicles which are delivered into the possession or custody of the 
contractor, who will provide the required services including the parking 
or retrieval of the vehicles.
    (c) There are a number of types of contracts which, while outside 
the Act's coverage in the usual case, may be subject to its provisions 
under the conditions and circumstances of a particular procurement, 
because these may be such as to require a different view of the 
principal purpose of the contract. Thus, the ordinary contract for the 
recapping of tires would have as its principal purpose the manufacture 
and furnishing of rebuilt tires for the Government rather than the 
furnishing of services through the use of service employees, and thus 
would be outside the Act's coverage. Similarly, contracts calling for 
printing, reproduction, and duplicating ordinarily would appear to have 
as their principal purpose the furnishing in quantity of printed, 
reproduced or duplicated written materials rather than the furnishing of 
reproduction services through the use of service employees. However, in 
a particular case, the terms, conditions, and circumstances of the 
procurement may be such that the facts would show its purpose to be 
chiefly the furnishing of services (e.g. repair services, typesetting, 
photocopying, editing, etc.), and where such services require the use of 
service employees the contract would be subject to the Act unless 
excluded therefrom for some other reason.



Secs. 4.135-4.139  [Reserved]

                     Determining Amount of Contract



Sec. 4.140  Significance of contract amount.

    As set forth in Sec. 4.104 and in the requirements of Secs. 4.6-4.7, 
the obligations of a contractor with respect to labor standards differ 
in the case of a covered and nonexempt contract, depending on whether 
the contract is or is not in excess of $2,500. Rules for resolving 
questions that may arise as to whether a contract is or is not in excess 
of this figure are set forth in the following sections.



Sec. 4.141  General criteria for measuring amount.

    (a) In general, the contract amount is measured by the consideration 
agreed to be paid, whether in money or other valuable consideration, in 
return for the obligations assumed under the contract. Thus, even though 
a contractor, such as a wrecker entering into a contract with the 
Government to raze a building on a site which will remain vacant, may 
not be entitled to receive any money from the Government for such work 
under his contract or may even agree to pay the Government in return for 
the right to dispose of the salvaged materials, the contract will be 
deemed one in excess of $2,500 if the value of the property obtained by 
the contractor, less anything he might pay the Government, is in excess 
of such amount. In addition, concession contracts are considered to be 
contracts in excess of $2,500 if the contractor's gross receipts under 
the contract may exceed $2,500.
    (b) All bids from the same person on the same invitation for bids 
will constitute a single offer, and the total award to such person will 
determine the amount involved for purposes of the Act. Where the 
procurement is made without formal advertising, in arriving at the 
aggregate amount involved, there must be included all property and 
services which would properly

[[Page 78]]

be grouped together in a single transaction and which would be included 
in a single advertisement for bids if the procurement were being 
effected by formal advertising. Therefore, if an agency procures 
continuing services through the issuance of monthly purchase orders, the 
amount of the contract for purposes of application of the Act is not 
measured by the amount of an individual purchase order. In such cases, 
if the continuing services were procured through formal advertising, the 
contract term would typically be for one year, and the monthly purchase 
orders must be grouped together to determine whether the yearly amount 
may exceed $2,500. However, a purchase order for services which are not 
continuing but are performed on a one-time or sporadic basis and which 
are not performed under a requirements contract or under the terms of a 
basic ordering agreement or similar agreement need not be equated to a 
yearly amount. (See Sec. 4.142(b).) In addition, where an invitation is 
for services in an amount in excess of $2,500 and bidders are permitted 
to bid on a portion of the services not amounting to more than $2,500, 
the amounts of the contracts awarded separately to individual and 
unrelated bidders will be measured by the portions of the services 
covered by their respective contracts.
    (c) Where a contract is issued in an amount in excess of $2,500 this 
amount will govern for purposes of application of the Act even though 
penalty deductions, deductions for prompt payment, and similar 
deductions may reduce the amount actually expended by the Government to 
$2,500 or less.



Sec. 4.142  Contracts in an indefinite amount.

    (a) Every contract subject to this Act which is indefinite in amount 
is required to contain the clauses prescribed in Sec. 4.6 for contracts 
in excess of $2,500, unless the contracting officer has definite 
knowledge in advance that the contract will not exceed $2,500 in any 
event.
    (b) Where contracts or agreements between a Government agency and 
prospective purveyors of services are negotiated which provide terms and 
conditions under which services will be furnished through the use of 
service employees in response to individual purchase orders or calls, if 
any, which may be issued by the agency during the life of the agreement, 
these agreements would ordinarily constitute contracts within the 
intendment of the Act under principles judicially established in United 
Biscuit Co. v. Wirtz, 17 WH Cases 146 (C.A.D.C.), a case arising under 
the Walsh-Healey Public Contracts Act. Such a contract, which may be in 
the nature of a bilateral option contract or basic ordering agreement 
and not obligate the Government to order any services or the contractor 
to furnish any, nevertheless governs any procurement of services that 
may be made through purchase orders or calls issued under its terms. 
Since the amount of the contract is indefinite, it is subject to the 
rule stated in paragraph (a) of this section. The amount of the contract 
is not determined by the amount of any individual call or purchase 
order.

                      Changes in Contract Coverage



Sec. 4.143  Effects of changes or extensions of contracts, generally.

    (a) Sometimes an existing service contract is modified, amended, or 
extended in such a manner that the changed contract is considered to be 
a new contract for purposes of the application of the Act's provisions. 
The general rule with respect to such contracts is that, whenever 
changes affecting the labor requirements are made in the terms of the 
contract, the provisions of the Act and the regulations thereunder will 
apply to the changed contract in the same manner and to the same extent 
as they would to a wholly new contract. However, contract modifications 
or amendments (other than contract extensions) that are unrelated to the 
labor requirements of a contract will not be deemed to create a new 
contract for purposes of the Act. In addition, only significant changes 
related to labor requirements will be considered as creating new 
contracts. This limitation on the application of the Act has been found 
to be in accordance with the provisions of section 4(b) of the Act.
    (b) Also, whenever the term of an existing contract is extended, 
pursuant

[[Page 79]]

to an option clause or otherwise, so that the contractor furnishes 
services over an extended period of time, rather than being granted 
extra time to fulfill his original commitment, the contract extension is 
considered to be a new contract for purposes of the application of the 
Act's provisions. All such ``new'' contracts as discussed above require 
the insertion of a new or revised wage determination in the contract as 
provided in Sec. 4.5.



Sec. 4.144  Contract modifications affecting amount.

    Where a contract that was originally issued in an amount not in 
excess of $2,500 is later modified so that its amount may exceed that 
figure, all the provisions of section 2(a) of the Act, and the 
regulations thereunder, are applicable from the date of modification to 
the date of contract completion. In the event of such modification, the 
contracting officer shall immediately obtain a wage determination from 
the Department of Labor using the e98 application or directly from WDOL, 
and insert the required contract clauses and any wage determination 
issued into the contract. In the event that a contract for services 
subject to the Act in excess of $2,500 is modified so that it cannot 
exceed $2,500, compliance with the provisions of section 2(a) of the Act 
and the contract clauses required thereunder ceases to be an obligation 
of the contractor when such modification becomes effective.

[70 FR 50899, Aug. 26, 2005]



Sec. 4.145  Extended term contracts.

    (a) Sometimes service contracts are entered into for an extended 
term exceeding one year; however, their continuation in effect is 
subject to the appropriation by Congress of funds for each new fiscal 
year. In such event, for purposes of this Act, a contract shall be 
deemed entered into upon the contract anniversary date which occurs in 
each new fiscal year during which the terms of the original contract are 
made effective by an appropriation for that purpose. In other cases a 
service contract, entered into for a specified term by a Government 
agency, may contain a provision such as an option clause under which the 
agency may unilaterally extend the contract for a period of the same 
length or other stipulated period. Since the exercise of the option 
results in the rendition of services for a new or different period not 
included in the term for which the contractor is obligated to furnish 
services or for which the Government is obligated to pay under the 
original contract in the absence of such action to extend it, the 
contract for the additional period is a wholly new contract with respect 
to application of the Act's provisions and the regulations thereunder 
(see Sec. 4.143(b)).
    (b) With respect to multi-year service contracts which are not 
subject to annual appropriations (for example, concession contracts 
which are funded through the concessionaire's sales, certain operations 
and maintenance contracts which are funded with so-called ``no year 
money'' or contracts awarded by instrumentalities of the United States, 
such as the Federal Reserve Banks, which do not receive appropriated 
funds), section 4(d) of the Act allows such contracts to be awarded for 
a period of up to five years on the condition that the multi-year 
contracts will be amended no less often than once every two years to 
incorporate any new Service Contract Act wage determination which may be 
applicable. Accordingly, unless the contracting agency is notified to 
the contrary (see Sec. 4.4(d)), such contracts are treated as wholly new 
contracts for purposes of the application of the Act's provisions and 
regulations thereunder at the end of the second year and again at the 
end of the fourth year, etc. The two-year period is considered to begin 
on the date that the contractor commences performance on the contract 
(i.e., anniversary date) rather than on the date of contract award.

                           Period of Coverage



Sec. 4.146  Contract obligations after award, generally.

    A contractor's obligation to observe the provisions of the Act 
arises on the date the contractor is informed that award of the contract 
has been made, and not necessarily on the date of formal execution. 
However, the contractor is required to comply with the

[[Page 80]]

provisions of the Act and regulations thereunder only while the 
employees are performing on the contract, provided the contractor's 
records make clear the period of such performance. (See also 
Sec. 4.179.) If employees of the contractor are required by the contract 
to complete certain preliminary training or testing prior to the 
commencement of the contract services, or if there is a phase-in period 
which allows the new contractor's employees to familiarize themselves 
with the contract work so as to provide a smooth transition between 
contractors, the time spent by employees undertaking such training or 
phase-in work is considered to be hours worked on the contract and must 
be compensated for even though the principal contract services may not 
commence until a later date.



Secs. 4.147-4.149  [Reserved]

                      Employees Covered by the Act



Sec. 4.150  Employee coverage, generally.

    The Act, in section 2(b), makes it clear that its provisions apply 
generally to all service employees engaged in performing work on a 
covered contract entered into by the contractor with the Federal 
Government, regardless of whether they are the contractor's employees or 
those of any subcontractor under such contract. All service employees 
who, on or after the date of award, are engaged in working on or in 
connection with the contract, either in performing the specific services 
called for by its terms or in performing other duties necessary to the 
performance of the contract, are thus subject to the Act unless a 
specific exemption (see Secs. 4.115 et seq.) is applicable. All such 
employees must be paid wages at a rate not less than the minimum wage 
specified under section 6(a)(1) of the Fair Labor Standards Act (29 
U.S.C. 206(a)(1)), as amended. Payment of a higher minimum monetary wage 
and the furnishing of fringe benefits may be required under the 
contract, pursuant to the provisions of sections 2 (a)(1), (2), and 4(c) 
of the Act.



Sec. 4.151  Employees covered by provisions of section 2(a).

    The provisions of sections 2(a) and 4(c) of the Act prescribe labor 
standards requirements applicable, except as otherwise specifically 
provided, to every contract in excess of $2,500 which is entered into by 
the United States or the District of Columbia for the principal purpose 
of furnishing services in the United States through the use of service 
employees. These provisions apply to all service employees engaged in 
the performance of such a contract or any subcontract thereunder. The 
Act, in section 8(b) defines the term service employee. The general 
scope of the definition is considered in Sec. 4.113(b) of this subpart.



Sec. 4.152  Employees subject to prevailing compensation provisions of
sections 2(a)(1) and (2) and 4(c).

    (a) Under sections 2(a)(1) and (2) and 4(c) of the Act, minimum 
monetary wages and fringe benefits to be paid or furnished the various 
classes of service employees performing such contract work are 
determined by the Secretary of Labor or his authorized representative in 
accordance with prevailing rates and fringe benefits for such employees 
in the locality or in accordance with the rates contained in a 
predecessor contractor's collective bargaining agreement, as 
appropriate, and are required to be specified in such contracts and 
subcontracts thereunder. All service employees of the classes who 
actually perform the specific services called for by the contract (e.g., 
janitors performing on a contract for office cleaning; stenographers 
performing on a contract for stenographic reporting) are covered by the 
provisions specifying such minimum monetary wages and fringe benefits 
for such classes of service employees and must be paid not less than the 
applicable rate established for the classification(s) of work performed. 
Pursuant to section 4.6(b)(2), conforming procedures are required to be 
observed for all such classes of service employees not listed in the 
wage determination incorporated in the contract.
    (b) The duties which an employee actually performs govern the 
classification and the rate of pay to which the employee is entitled 
under the applicable wage determination. Some job classifications listed 
in an applicable wage determination are descriptive by title

[[Page 81]]

and have commonly understood meanings (e.g., janitors, security guards, 
pilots, etc.). In such situations, detailed position descriptions may 
not be included in the wage determination. However, in cases where 
additional descriptive information is needed to inform users of the 
scope of duties included in the classification, the wage determination 
will generally contain detailed position descriptions based on the data 
source relied upon for the issuance of the wage determination.
    (c)(1) Some wage determinations will list a series of classes within 
a job classification family, e.g., Computer Operators, Class A, B, and 
C, or Electronic Technicians, Class A, B, and C, or Clerk Typist, Class 
A and B. Generally, the lowest level listed for a job classification 
family is considered to be the entry level and establishment of a lower 
level through conformance (Sec. 4.6(b)(2)) is not permissible. Further, 
trainee classifications cannot be conformed. Helpers in skilled 
maintenance trades (e.g., electricians, machinists, automobile 
mechanics, etc.) whose duties constitute, in fact, separate and distinct 
jobs, may also be used if listed on the wage determination, but cannot 
be conformed. Conformance may not be used to artificially split or 
subdivide classifications listed in the wage determination. However, 
conforming procedures may be used if the work which an employee performs 
under the contract is not within the scope of any classification listed 
on the wage determination, regardless of job title.
    (2) Subminimum rates for apprentices, student learners, and 
handicapped workers are permissible under the conditions discussed in 
Sec. 4.6 (o) and (p).



Sec. 4.153  Inapplicability of prevailing compensation provisions
to some employees.

    There may be employees used by a contractor or subcontractor in 
performing a service contract in excess of $2,500 which is subject to 
the Act, whose services, although necessary to the performance of the 
contract, are not subject to minimum monetary wage or fringe benefit 
provisions contained in the contract pursuant to section 2(a) because 
such employees are not directly engaged in performing the specified 
contract services. An example might be a laundry contractor's billing 
clerk performing billing work with respect to the items laundered. In 
all such situations, the employees who are necessary to the performance 
of the contract but not directly engaged in the performance of the 
specified contract services, are nevertheless subject to the minimum 
wage provision of section 2(b) (see Sec. 4.150) requiring payment of not 
less than the minimum wage specified under section 6(a)(1) of the Fair 
Labor Standards Act to all employees working on a covered contract, 
unless specifically exempt. However, in situations where minimum 
monetary wages and fringe benefits for a particular class or classes of 
service employees actually performing the services called for by the 
contract have not been specified in the contract because the wage and 
fringe benefit determination applicable to the contract has been made 
only for other classes of service employees who will perform the 
contract work, the employer will be required to pay the monetary wages 
and fringe benefits which may be specified for such classes of employees 
pursuant to the conformance procedures provided in Sec. 4.6(b).



Sec. 4.154  Employees covered by sections 2(a)(3) and (4).

    The safety and health standards of section 2(a)(3) and the notice 
requirements of section 2(a)(4) of the Act (see Sec. 4.183) are 
applicable, in the absence of a specific exemption, to every service 
employee engaged by a contractor or subcontractor to furnish services 
under a contract subject to section 2(a) of the Act.



Sec. 4.155  Employee coverage does not depend on form of employment
contract.

    The Act, in section 8(b), makes it plain that the coverage of 
service employees depends on whether their work for the contractor or 
subcontractor on a covered contract is that of a service employee as 
defined in section 8(b) and not on any contractual relationship that may 
be alleged to exist between the contractor or subcontractor and

[[Page 82]]

such persons. In other words, any person, except those discussed in 
Sec. 4.156 below, who performs work called for by a contract or that 
portion of a contract subject to the Act is, per se, a service employee. 
Thus, for example, a person's status as an ``owner-operator'' or an 
``independent contractor'' is immaterial in determining coverage under 
the Act and all such persons performing the work of service employees 
must be compensated in accordance with the Act's requirements.



Sec. 4.156  Employees in bona fide executive, administrative, or
professional capacity.

    The term service employee as defined in section 8(b) of the Act does 
not include persons employed in a bona fide executive, administrative, 
or professional capacity as those terms are defined in 29 CFR part 541. 
Employees within the definition of service employee who are employed in 
an executive, administrative, or professional capacity are not excluded 
from coverage, however, even though they are highly paid, if they fail 
to meet the tests set forth in 29 CFR part 541. Thus, such employees as 
laboratory technicians, draftsmen, and air ambulance pilots, though they 
require a high level of skill to perform their duties and may meet the 
salary requirements of the regulations in part 541 of this title, are 
ordinarily covered by the Act's provisions because they do not typically 
meet the other requirements of those regulations.



Secs. 4.157-4.158  [Reserved]



                    Subpart D_Compensation Standards



Sec. 4.159  General minimum wage.

    The Act, in section 2(b)(1), provides generally that no contractor 
or subcontractor under any Federal contract subject to the Act shall pay 
any employee engaged in performing work on such a contract less than the 
minimum wage specified under section 6(a)(1) of the Fair Labor Standards 
Act. Section 2(a)(1) provides that the minimum monetary wage specified 
in any such contract exceeding $2,500 shall in no case be lower than 
this Fair Labor Standards Act minimum wage. Section 2(b)(1) is a 
statutory provision which applies to the contractor or subcontractor 
without regard to whether it is incorporated in the contract; however, 
Secs. 4.6 and 4.7 provide for inclusion of its requirements in covered 
contracts and subcontracts. Because this statutory requirement specifies 
no fixed monetary wage rate and refers only to the minimum wage 
specified under section 6(a)(1) of the Fair Labor Standards Act, and 
because its application does not depend on provisions of the contract, 
any increase in such Fair Labor Standards Act minimum wage during the 
life of the contract is, on its effective date, also effective to 
increase the minimum wage payable under section 2(b)(1) to employees 
engaged in performing work on the contract.

[48 FR 49762, Oct. 27, 1983, as amended at 76 FR 18854, Apr. 5, 2011]



Sec. 4.160  Effect of section 6(e) of the Fair Labor Standards Act.

    Contractors and subcontractors performing work on contracts subject 
to the Service Contract Act are required to pay all employees, including 
those employees who are not performing work on or in connection with 
such contracts, not less than the general minimum wage standard provided 
in section 6(a)(1) of the Fair Labor Standards Act, as amended (Pub. L. 
95-151).



Sec. 4.161  Minimum monetary wages under contracts exceeding $2,500.

    The standards established pursuant to the Act for minimum monetary 
wages to be paid by contractors and subcontractors under service 
contracts in excess of $2,500 to service employees engaged in 
performance of the contract or subcontract are required to be specified 
in the contract and in all subcontracts (see Sec. 4.6). Pursuant to the 
statutory scheme provided by sections 2(a)(1) and 4(c) of the Act, every 
covered contract (and any bid specification therefor) which is in excess 
of $2,500 shall contain a provision specifying the minimum monetary 
wages to be paid the various classes of service employees engaged in the 
performance of the contract or any subcontract thereunder, as determined 
by the Secretary or his authorized representative

[[Page 83]]

in accordance with prevailing rates for such employees in the locality, 
or, where a collective bargaining agreement applied to the employees of 
a predecessor contractor in the same locality, in accordance with the 
rates for such employees provided for in such agreement, including 
prospective wage increases as provided in such agreement as a result of 
arm's-length negotiations. In no case may such wages be lower than the 
minimum wage specified under section 6(a)(1) of the Fair Labor Standards 
Act of 1938, as amended. (For a detailed discussion of the application 
of section 4(c) of the Act, see Sec. 4.163.) If some or all of the 
determined wages in a contract fall below the level of the Fair Labor 
Standards Act minimum by reason of a change in that rate by amendment of 
the law, these rates become obsolete and the employer is obligated under 
section 2(b)(1) of the Service Contract Act to pay the minimum wage rate 
established by the amendment as of the date it becomes effective. A 
change in the Fair Labor Standards Act minimum by operation of law would 
also have the same effect on advertised specifications or negotiations 
for covered service contracts, i.e., it would make ineffective and would 
supplant any lower rate or rates included in such specifications or 
negotiations whether or not determined. However, unless affected by such 
a change in the Fair Labor Standards Act minimum wage, by contract 
changes necessitating the insertion of new wage provisions (see 
Secs. 4.5(c) and 4.143-4.145) or by the requirements of section 4(c) of 
the Act (see Sec. 4.163), the minimum monetary wage rate specified in 
the contract for each of the classes of service employees for which wage 
determinations have been made under section 2(a)(1) will continue to 
apply throughout the period of contract performance. No change in the 
obligation of the contractor or subcontractor with respect to minimum 
monetary wages will result from the mere fact that higher or lower wage 
rates may be determined to be prevailing for such employees in the 
locality after the award and before completion of the contract. Such 
wage determinations are effective for contracts not yet awarded, as 
provided in Sec. 4.5(a).



Sec. 4.162  Fringe benefits under contracts exceeding $2,500.

    (a) Pursuant to the statutory scheme provided by sections 2(a)(2) 
and 4(c) of the Act, every covered contract in excess of $2,500 shall 
contain a provision specifying the fringe benefits to be furnished the 
various classes of service employees, engaged in the performance of the 
contract or any subcontract thereunder, as determined by the Secretary 
or his authorized representative to be prevailing for such employees in 
the locality or, where a collective bargaining agreement applied to the 
employees of a predecessor contractor in the same locality, the various 
classes of service employees engaged in the performance of the contract 
or any subcontract must be provided the fringe benefits, including 
prospective or accrued fringe benefit increases, provided for in such 
agreement as a result of arm's-length negotiations. (For a detailed 
discussion of section 4(c) of the Act, see Sec. 4.163.) As provided by 
section 2(a)(2) of the Act, fringe benefits include 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 foregoing, unemployment benefits, life insurance, disability 
and sickness insurance, accident insurance, vacation and holiday pay, 
costs of apprenticeship or other similar programs and other bona fide 
fringe benefits not otherwise required by Federal, State, or local law 
to be provided by the contractor or subcontractor.
    (b) Under this provision, the fringe benefits, if any, which the 
contractor or subcontractor is required to furnish the service employees 
engaged in the performance of the contract are specified in the contract 
documents (see Sec. 4.6). How the contractor may satisfy this obligation 
is dealt with in Secs. 4.170 through 4.177 of this part. A change in the 
fringe benefits required by the contract provision will not result from 
the mere fact that other or additional fringe benefits are determined to 
be prevailing for such employees in the locality at a time subsequent to 
the award but before completion of the contract. Such fringe benefit 
determinations are effective for contracts

[[Page 84]]

not yet awarded (see Sec. 4.5(a)), or in the event that changes in an 
existing contract requiring their insertion for prospective application 
have occurred (see Secs. 4.143 through 4.145). However, none of the 
provisions of this paragraph may be construed as altering a successor 
contractor's obligations under section 4(c) of the Act. (See 
Sec. 4.163.)



Sec. 4.163  Section 4(c) of the Act.

    (a) Section 4(c) of the Act provides that no ``contractor or 
subcontractor under a contract, which succeeds a contract subject to 
this Act and under which substantially the same services are furnished, 
shall pay any service employee under such contract less than the wages 
and fringe benefits, including accrued wages and fringe benefits, and 
any prospective increases in wages and fringe benefits provided for in a 
collective-bargaining agreement as a result of arm's-length 
negotiations, to which such service employees would have been entitled 
if they were employed under the predecessor contract: Provided, That in 
any of the foregoing circumstances such obligations shall not apply if 
the Secretary finds after a hearing in accordance with regulations 
adopted by the Secretary that such wages and fringe benefits are 
substantially at variance with those which prevail for services of a 
character similar in the locality.'' Under this provision, the successor 
contractor's sole obligation is to insure that all service employees are 
paid no less than the wages and fringe benefits to which such employees 
would have been entitled if employed under the predecessor's collective 
bargaining agreement (i.e., irrespective of whether the successor's 
employees were or were not employed by the predecessor contractor). The 
obligation of the successor contractor is limited to the wage and fringe 
benefit requirements of the predecessor's collective bargaining 
agreement and does not extend to other items such as seniority, 
grievance procedures, work rules, overtime, etc.
    (b) Section 4(c) is self-executing. Under section 4(c), a successor 
contractor in the same locality as the predecessor contractor is 
statutorily obligated to pay no less than the wage rates and fringe 
benefits which were contained in the predecessor contractor's collective 
bargaining agreement. This is a direct statutory obligation and 
requirement placed on the successor contractor by section 4(c) and is 
not contingent or dependent upon the issuance or incorporation in the 
contract of a wage determination based on the predecessor contractor's 
collective bargaining agreement. Pursuant to section 4(b) of the Act, a 
variation has been granted which limits the self-executing application 
of section 4(c) in the circumstances and under the conditions described 
in Sec. 4.1b(b) of this part. It must be emphasized, however, that the 
variation in Sec. 4.1b(b) is applicable only if the contracting officer 
has given both the incumbent (predecessor) contractor and the employees' 
collective bargaining representative notification at least 30 days in 
advance of any estimated procurement date.
    (c) Variance hearings. The regulations and procedures for hearings 
pursuant to section 4(c) of the Act are contained in Sec. 4.10 of 
subpart A and parts 6 and 8 of this title. If, as the result of such 
hearing, some or all of the wage rate and/or fringe benefit provisions 
of a predecessor contractor's collective bargaining agreement are found 
to be substantially at variance with the wage rates and/or fringe 
benefits prevailing in the locality, the Administrator will cause a new 
wage determination to be issued in accordance with the decision of the 
Administrative Law Judge or the Administrative Review Board, as 
appropriate. Since ``it was the clear intent of Congress that any 
revised wage determinations resulting from a section 4(c) proceeding 
were to have validity with respect to the procurement involved'' (53 
Comp. Gen. 401, 402, 1973), the solicitation, or the contract if already 
awarded, must be amended to incorporate the newly issued wage 
determination. Such new wage determination shall be made applicable to 
the contract as of the date of the Administrative Law Judge's decision 
or, where the decision is reviewed by the Administrative Review Board, 
the date of that decision. The legislative history of the 1972 
Amendments makes clear that the collectively bargained ``wages and 
fringe benefits shall continue to be

[[Page 85]]

honored * * * unless and until the Secretary finds, after a hearing, 
that such wages and fringe benefits are substantially at variance with 
those prevailing in the locality for like services'' (S. Rept. 92-1131, 
92nd Cong., 2d Sess. 5). Thus, variance decisions do not have 
application retroactive to the commencement of the contract.
    (d) Sections 2(a) and 4(c) must be read in conjunction. The Senate 
report accompanying the bill which amended the Act in 1972 states that 
``Sections 2(a)(1), 2(a)(2), and 4(c) must be read in harmony to reflect 
the statutory scheme.'' (S. Rept. 92-1131, 92nd Cong., 2nd Sess. 4.) 
Therefore, since section 4(c) refers only to the predecessor 
contractor's collective bargaining agreement, the reference to 
collective bargaining agreements in sections 2(a)(1) and 2(a)(2) can 
only be read to mean a predecessor contractor's collective bargaining 
agreement. The fact that a successor contractor may have its own 
collective bargaining agreement does not negate the clear mandate of the 
statute that the wages and fringe benefits called for by the predecessor 
contractor's collective bargaining agreement shall be the minimum 
payable under a new (successor) contract nor does it negate the 
application of a prevailing wage determination issued pursuant to 
section 2(a) where there was no applicable predecessor collective 
bargaining agreement. 48 Comp. Gen. 22, 23-24 (1968). In addition, 
because section 2(a) only applies to covered contracts in excess of 
$2,500, the requirements of section 4(c) likewise apply only to 
successor contracts which may be in excess of $2,500. However, if the 
successor contract is in excess of $2,500, section 4(c) applies 
regardless of the amount of the predecessor contract. (See Secs. 4.141-
4.142 for determining contract amount.)
    (e) The operative words of section 4(c) refer to ``contract'' not 
``contractor''. Section 4(c) begins with the language, ``[n]o contractor 
or subcontractor under a contract, which succeeds a contract subject to 
this Act'' (emphasis supplied). Thus, the statute is applicable by its 
terms to a successor contract without regard to whether the successor 
contractor was also the predecessor contractor. A contractor may become 
its own successor because it was the successful bidder on a 
recompetition of an existing contract, or because the contracting agency 
exercises an option or otherwise extends the term of the existing 
contract, etc. (See Secs. 4.143-4.145.) Further, since sections 2(a) and 
4(c) must be read in harmony to reflect the statutory scheme, it is 
clear that the provisions of section 4(c) apply whenever the Act or the 
regulations require that a new wage determination be incorporated into 
the contract (53 Comp. Gen. 401, 404-6 (1973)).
    (f) Collective bargaining agreement must be applicable to work 
performed on the predecessor contract. Section 4(c) will be operative 
only if the employees who worked on the predecessor contract were 
actually paid in accordance with the wage and fringe benefit provisions 
of a predecessor contractor's collective bargaining agreement. Thus, for 
example, section 4(c) would not apply if the predecessor contractor 
entered into a collective bargaining agreement for the first time, which 
did not become effective until after the expiration of the predecessor 
contract. Likewise, the requirements of section 4(c) would not apply if 
the predecessor contractor's collective bargaining agreement applied 
only to other employees of the firm and not to the employees working on 
the contract.
    (g) Contract reconfigurations. As a result of changing priorities, 
mission requirements, or other considerations, contracting agencies may 
decide to restructure their support contracts. Thus, specific contract 
requirements from one contract may be broken out and placed in a new 
contract or combined with requirements from other contracts into a 
consolidated contract. The protections afforded service employees under 
section 4(c) are not lost or negated because of such contract 
reconfigurations, and the predecessor contractor's collectively 
bargained rates follow identifiable contract work requirements into new 
or consolidated contracts, provided that the new or consolidated 
contract is for services which were furnished in the same locality under 
a predecessor contract. See Sec. 4.163(i). However, where there is more 
than one predecessor contract to the new or consolidated contract, and

[[Page 86]]

where the predecessor contracts involve the same or similar function(s) 
of work, using substantially the same job classifications, the 
predecessor contract which covers the greater portion of the work in 
such function(s) shall be deemed to be the predecessor contract for 
purposes of section 4(c), and the collectively bargained wages and 
fringe benefits under that contract, if any, shall be applicable to such 
function(s). This limitation on the application of section 4(c) is 
necessary and proper in the public interest and is in accord with the 
remedial purpose of the Act to protect prevailing labor standards.
    (h) Interruption of contract services. Other than the requirement 
that substantially the same services be furnished, the requirement for 
arm's-length negotiations and the provision for variance hearings, the 
Act does not impose any other restrictions on the application of section 
4(c). Thus, the application of section 4(c) is not negated because the 
contracting authority may change and the successor contract is awarded 
by a different contracting agency. Also, there is no requirement that 
the successor contract commence immediately after the completion or 
termination of the predecessor contract, and an interruption of contract 
services does not negate the application of section 4(c). Contract 
services may be interrupted because the Government facility is 
temporarily closed for renovation, or because a predecessor defaulted on 
the contract or because a bid protest has halted a contract award 
requiring the Government to perform the services with its own employees. 
In all such cases, the requirements of section 4(c) would apply to any 
successor contract which may be awarded after the temporary interruption 
or hiatus. The basic principle in all of the preceding examples is that 
successorship provisions of section 4(c) apply to the full term 
successor contract. Therefore, temporary interim contracts, which allow 
a contracting agency sufficient time to solicit bids for a full term 
contract, also do not negate the application of section 4(c) to a full 
term successor contract.
    (i) Place of performance. The successorship requirements of section 
4(c) apply to all contracts for substantially the same services as were 
furnished under a predecessor contract in the same locality. As stated 
in Sec. 4.4(a)(2), a wage determination incorporated in the contract 
shall be applicable thereto regardless of whether the successful 
contractor subsequently changes the place(s) of contract performance. 
Similarly, the application of section 4(c) (and any wage determination 
issued pursuant to section 4(c) and included in the contract) is not 
negated by the fact that a successor prime contractor subsequently 
changes the place(s) of contract performance or subcontracts any part of 
the contract work to a firm which performs the work in a different 
locality.
    (j) Interpretation of wage and fringe benefit provisions of wage 
determinations issued pursuant to sections 2(a) and 4(c). Wage 
determinations which are issued for successor contracts subject to 
section 4(c) are intended to accurately reflect the rates and fringe 
benefits set forth in the predecessor's collective bargaining agreement. 
However, failure to include in the wage determination any job 
classification, wage rate, or fringe benefit encompassed in the 
collective bargaining agreement does not relieve the successor 
contractor of the statutory requirement to comply at a minimum with the 
terms of the collective bargaining agreement insofar as wages and fringe 
benefits are concerned. Since the successor's obligations are governed 
by the terms of the collective bargaining agreement, any interpretation 
of the wage and fringe benefit provisions of the collective bargaining 
agreement where its provisions are unclear must be based on the intent 
of the parties to the collective bargaining agreement, provided that 
such interpretation is not violative of law. Therefore, some of the 
principles discussed in Secs. 4.170 through 4.177 regarding specific 
interpretations of the fringe benefit provisions of prevailing wage 
determinations may not be applicable to wage determinations issued 
pursuant to section 4(c). As provided in section 2(a)(2), a contractor 
may satisfy its fringe benefit obligations under any wage determination 
``by furnishing any equivalent combinations of fringe benefits or by 
making equivalent or differential payments

[[Page 87]]

in cash'' in accordance with the rules and regulations set forth in 
Sec. 4.177 of this subpart.
    (k) No provision of this section shall be construed as permitting a 
successor contractor to pay its employees less than the wages and fringe 
benefits to which such employees would have been entitled under the 
predecessor contractor's collective bargaining agreement. Thus, some of 
the principles discussed in Sec. 4.167 may not be applicable in section 
4(c) successorship situations. For example, unless the predecessor 
contractor's collective bargaining agreement allowed the deduction from 
employees' wages of the reasonable cost or fair value for providing 
board, lodging, or other facilities, the successor may not include such 
costs as part of the applicable minimum wage specified in the wage 
determination. Likewise, unless the predecessor contractor's agreement 
allowed a tip credit (Sec. 4.6(q)), the successor contractor may not 
take a tip credit toward satisfying the minimum wage requirements under 
sections 2(a)(1) and 4(c).



Sec. 4.164  [Reserved]

                 Compliance with Compensation Standards



Sec. 4.165  Wage payments and fringe benefits--in general.

    (a)(1) Monetary wages specified under the Act shall be paid to the 
employees to whom they are due promptly and in no event later than one 
pay period following the end of the pay period in which they are earned. 
No deduction, rebate, or refund is permitted, except as hereinafter 
stated. The same rules apply to cash payments authorized to be paid with 
the statutory monetary wages as equivalents of determined fringe 
benefits (see Sec. 4.177).
    (2) The Act makes no distinction, with respect to its compensation 
provisions, between temporary, part-time, and full-time employees, and 
the wage and fringe benefit determinations apply, in the absence of an 
express limitation, equally to all such service employees engaged in 
work subject to the Act's provisions. (See Sec. 4.176 regarding fringe 
benefit payments to temporary and part-time employees.)
    (b) The Act does not prescribe the length of the pay period. 
However, for purposes of administration of the Act, and to conform with 
practices required under other statutes that may be applicable to the 
employment, wages and hours worked must be calculated on the basis of a 
fixed and regularly recurring workweek of seven consecutive 24-hour 
workday periods, and the records must be kept on this basis. It is 
appropriate to use this workweek for the pay period. A bi-weekly or 
semimonthly, pay period may, however, be used if advance notification is 
given to the affected employees. A pay period longer than semimonthly is 
not recognized as appropriate for service employees and wage payments at 
greater intervals will not be considered as constituting proper payments 
in compliance with the Act.
    (c) The prevailing rate established by a wage determination under 
the Act is a minimum rate. A contractor is not precluded from paying 
wage rates in excess of those determined to be prevailing in the 
particular locality. Nor does the Act affect or require the changing of 
any provisions of union contracts specifying higher monetary wages or 
fringe benefits than those contained in an applicable determination. 
However, if an applicable wage determination contains a wage or fringe 
benefit provision for a class of service employees which is higher than 
that specified in an existing union agreement, the determination's 
provision must be observed for any work performed on a contract subject 
to that determination.



Sec. 4.166  Wage payments--unit of payment.

    The standard by which monetary wage payments are measured under the 
Act is the wage rate per hour. An hourly wage rate is not, however, the 
only unit for payment of wages that may be used for employees subject to 
the Act. Employees may be paid on a daily, weekly, or other time basis, 
or by piece or task rates, so long as the measure of work and 
compensation used, when translated or reduced by computation to an 
hourly basis each workweek, will provide a rate per hour that will 
fulfill the statutory requirement. Whatever

[[Page 88]]

system of payment is used, however, must ensure that each hour of work 
in performance of the contract is compensated at not less than the 
required minimum rate. Failure to pay for certain hours at the required 
rate cannot be transformed into compliance with the Act by reallocating 
portions of payments made for other hours which are in excess of the 
specified minimum.



Sec. 4.167  Wage payments--medium of payment.

    The wage payment requirements under the Act for monetary wages 
specified under its provisions will be satisfied by the timely payment 
of such wages to the employee either in cash or negotiable instrument 
payable at par. Such payment must be made finally and unconditionally 
and ``free and clear.'' Scrip, tokens, credit cards, ``dope checks'', 
coupons, salvage material, and similar devices which permit the employer 
to retain and prevent the employee from acquiring control of money due 
for the work until some time after the pay day for the period in which 
it was earned, are not proper mediums of payment under the Act. If, as 
is permissible, they are used as a convenient device for measuring 
earnings or allowable deductions during a single pay period, the 
employee cannot be charged with the loss or destruction of any of them 
and the employer may not, because the employee has not actually redeemed 
them, credit itself with any which remain outstanding on the pay day in 
determining whether it has met the requirements of the Act. The employer 
may not include the cost of fringe benefits or equivalents furnished as 
required under section 2(a)(2) of the Act, as a credit toward the 
monetary wages it is required to pay under section 2(a)(1) or 2(b) of 
the Act (see Sec. 4.170). However, the employer may generally include, 
as a part of the applicable minimum wage which it is required to pay 
under the Act, the reasonable cost or fair value, as determined by the 
Administrator, of furnishing an employee with ``board, lodging, or other 
facilities,'' as defined in part 531 of this title, in situations where 
such facilities are customarily furnished to employees, for the 
convenience of the employees, not primarily for the benefit of the 
employer, and the employees' acceptance of them is voluntary and 
uncoerced. (See also Sec. 4.163(k).) The determination of reasonable 
cost or fair value will be in accordance with the Administrator's 
regulations under the Fair Labor Standards Act, contained in such part 
531 of this title. While employment on contracts subject to the Act 
would not ordinarily involve situations in which service employees would 
receive tips from third persons, the treatment of tips for wage purposes 
in the situations where this may occur should be understood. For 
purposes of this Act, tips may generally be included in wages in 
accordance with the regulations under the Fair Labor Standards Act, 
contained in part 531. (See also Sec. 4.6(q) and Sec. 4.163(k).) The 
general rule under that Act provides, when determining the wage an 
employer is required to pay a tipped employee, the maximum allowable 
hourly tip credit is limited to the difference between $2.13 and the 
applicable minimum wage specified in section 6(a)(1) of that Act. (See 
Sec. 4.163(k) for exceptions in section 4(c) situations.) In no event 
shall the sum credited as tips exceed the value of tips actually 
received by the employee. The tip credit is not available to an employer 
unless the employer has informed the employee of the tip credit 
provisions and all tips received by the employee have been retained by 
the employee (other than as part of a valid tip pooling arrangement 
among employees who customarily and regularly receive tips; see section 
3(m) of the Fair Labor Standards Act).

[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983, as amended at 76 
FR 18854, Apr. 5, 2011]



Sec. 4.168  Wage payments--deductions from wages paid.

    (a) The wage requirements of the Act will not be met where 
unauthorized deductions, rebates, or refunds reduce the wage payment 
made to the employee below the minimum amounts required under the 
provisions of the Act and the regulations thereunder, or where the 
employee fails to receive such amounts free and clear because he ``kicks 
back'' directly or indirectly to the employer or to another person for 
the employer's benefit the whole or part of the wage

[[Page 89]]

delivered to him. Authorized deductions are limited to those required by 
law, such as taxes payable by employees required to be withheld by the 
employer and amounts due employees which the employer is required by 
court order to pay to another; deductions allowable for the reasonable 
cost or fair value of board, lodging, and facilities furnished as set 
forth in Sec. 4.167; and deductions of amounts which are authorized to 
be paid to third persons for the employee's account and benefit pursuant 
to his voluntary assignment or order or a collective bargaining 
agreement with bona fide representatives of employees which is 
applicable to the employer. Deductions for amounts paid to third persons 
on the employee's account which are not so authorized or are contrary to 
law or from which the contractor, subcontractor or any affiliated person 
derives any payment, rebate, commission, profit, or benefit directly or 
indirectly, may not be made if they cut into the wage required to be 
paid under the Act. The principles applied in determining the 
permissibility of deductions for payments made to third persons are 
explained in more detail in Secs. 531.38-531.40 of this title.
    (b) Cost of maintaining and furnishing uniforms. (1) If the 
employees are required to wear uniforms either by the employer, the 
nature of the job, or the Government contract, then the cost of 
furnishing and maintaining the uniforms is deemed to be a business 
expense of the employer and such cost may not be borne by the employees 
to the extent that to do so would reduce the employees' compensation 
below that required by the Act. Since it may be administratively 
difficult and burdensome for employers to determine the actual cost 
incurred by all employees for maintaining their own uniforms, payment in 
accordance with the following standards is considered sufficient for the 
contractor to satisfy its wage obligations under the Act:
    (i) The contractor furnishes all employees with an adequate number 
of uniforms without cost to the employees or reimburses employees for 
the actual cost of the uniforms.
    (ii) Where uniform cleaning and maintenance is made the 
responsibility of the employee, the contractor reimburses all employees 
for such cleaning and maintenance at the rate of $3.35 a week (or 67 
cents a day). Since employees are generally required to wear a clean 
uniform each day regardless of the number of hours the employee may work 
that day, the preceding weekly amount generally may be reduced to the 
stated daily equivalent but not to an hourly equivalent. A contractor 
may reimburse employees at a different rate if the contractor furnishes 
affirmative proof as to the actual cost to the employees of maintaining 
their uniforms or if a different rate is provided for in a bona fide 
collective bargaining agreement covering the employees working on the 
contract.
    (2) However, there generally is no requirement that employees be 
reimbursed for uniform maintenance costs in those instances where the 
uniforms furnished are made of ``wash and wear'' materials which may be 
routinely washed and dried with other personal garments, and do not 
generally require daily washing, dry cleaning, commercial laundering, or 
any other special treatment because of heavy soiling in work usage or in 
order to meet the cleanliness or appearance standards set by the terms 
of the Government contract, by the contractor, by law, or by the nature 
of the work. This limitation does not apply where a different provision 
has been set forth on the applicable wage determination. In the case of 
wage determinations issued under section 4(c) of the Act for successor 
contracts, the amount established by the parties to the predecessor 
collective bargaining agreement is deemed to be the cost of laundering 
wash and wear uniforms.
    (c) Stipends, allowances or other payments made directly to an 
employee by a party other than the employer (such as a stipend for 
training paid by the Veterans Administration) are not part of ``wages'' 
and the employer may not claim credit for such payments toward its 
monetary obligations under the Act.



Sec. 4.169  Wage payments--work subject to different rates.

    If an employee during a workweek works in different capacities in 
the

[[Page 90]]

performance of the contract and two or more rates of compensation under 
section 2 of the Act are applicable to the classes of work which he or 
she performs, the employee must be paid the highest of such rates for 
all hours worked in the workweek unless it appears from the employer's 
records or other affirmative proof which of such hours were included in 
the periods spent in each class of work. The rule is the same where such 
an employee is employed for a portion of the workweek in work not 
subject to the Act, for which compensation at a lower rate would be 
proper if the employer by his records or other affirmative proof, 
segregated the worktime thus spent.



Sec. 4.170  Furnishing fringe benefits or equivalents.

    (a) General. Fringe benefits required under the Act shall be 
furnished, separate from and in addition to the specified monetary 
wages, by the contractor or subcontractor to the employees engaged in 
performance of the contract, as specified in the determination of the 
Secretary or his authorized representative and prescribed in the 
contract documents. Section 2(a)(2) of the Act provides that the 
obligation to furnish the specified benefits ``may be discharged by 
furnishing any equivalent combinations of fringe benefits or by making 
equivalent or differential payments in cash under rules and regulations 
established by the Secretary.'' The governing rules and regulations for 
furnishing such equivalents are set forth in Sec. 4.177 of this subpart. 
An employer cannot offset an amount of monetary wages paid in excess of 
the wages required under the determination in order to satisfy his 
fringe benefit obligations under the Act, and must keep appropriate 
records separately showing amounts paid for wages and amounts paid for 
fringe benefits.
    (b) Meeting the requirement, in general. The various fringe benefits 
listed in the Act and in Sec. 4.162(a) are illustrative of those which 
may be found to be prevailing for service employees in a particular 
locality. The benefits which an employer will be required to furnish 
employees performing on a particular contract will be specified in the 
contract documents. A contractor may dispose of certain of the fringe 
benefit obligations which may be required by an applicable fringe 
benefit determination, such as pension, retirement, or health insurance, 
by irrevocably paying the specified contributions for fringe benefits to 
an independent trustee or other third person pursuant to an existing 
``bona fide'' fund, plan, or program on behalf of employees engaged in 
work subject to the Act's provisions. Where such a plan or fund does not 
exist, a contractor must discharge his obligation relating to fringe 
benefits by furnishing either an equivalent combination of ``bona fide'' 
fringe benefits or by making equivalent payments in cash to the 
employee, in accordance with the regulations in Sec. 4.177.



Sec. 4.171  ``Bona fide'' fringe benefits.

    (a) To be considered a ``bona fide'' fringe benefit for purposes of 
the Act, a fringe benefit plan, fund, or program must constitute a 
legally enforceable obligation which meets the following criteria:
    (1) The provisions of a plan, fund, or program adopted by the 
contractor, or by contract as a result of collective bargaining, must be 
specified in writing, and must be communicated in writing to the 
affected employees. Contributions must be made pursuant to the terms of 
such plan, fund, or program. The plan may be either contractor-financed 
or a joint contractor-employee contributory plan. For example, employer 
contributions to Individual Retirement Accounts (IRAs) approved by IRS 
are permissible. However, any contributions made by employees must be 
voluntary, and if such contributions are made through payroll 
deductions, such deductions must be made in accordance with Sec. 4.168. 
No contribution toward fringe benefits made by the employees themselves, 
or fringe benefits provided from monies deducted from the employee's 
wages may be included or used by an employer in satisfying any part of 
any fringe benefit obligation under the Act.
    (2) The primary purpose of the plan must be to provide 
systematically for the payment of benefits to employees

[[Page 91]]

on account of death, disability, advanced age, retirement, illness, 
medical expenses, hospitalization, supplemental unemployment benefits, 
and the like.
    (3) The plan must contain a definite formula for determining the 
amount to be contributed by the contractor and a definite formula for 
determining the benefits for each of the employees participating in the 
plan.
    (4) Except as provided in paragraph (b), the contractor's 
contributions must be paid irrevocably to a trustee or third person 
pursuant to an insurance agreement, trust or other funded arrangement. 
The trustee must assume the usual fiduciary responsibilities imposed 
upon trustees by applicable law. The trust or fund must be set up in 
such a way that the contractor will not be able to recapture any of the 
contributions paid in nor in any way divert the funds to its own use or 
benefit.
    (5) Benefit plans or trusts of the types listed in 26 U.S.C. 401(a) 
which are disapproved by the Internal Revenue Service as not satisfying 
the requirements of section 401(a) of the Internal Revenue Code or which 
do not meet the requirements of the Employee Retirement Income Security 
Act of 1974, 29 U.S.C. 1001, et seq. and regulations thereunder, are not 
deemed to be ``bona fide'' plans for purposes of the Service Contract 
Act.
    (6) It should also be noted that such plans must meet certain other 
criteria as set forth in Sec. 778.215 of 29 CFR part 778 in order for 
any contributions to be excluded from computation of the regular rate of 
pay for overtime purposes under the Fair Labor Standards Act 
(Secs. 4.180-4.182).
    (b)(1) Unfunded self-insured fringe benefit plans (other than fringe 
benefits such as vacations and holidays which by their nature are 
normally unfunded) under which contractors allegedly make ``out of 
pocket'' payments to provide benefits as expenses may arise, rather than 
making irrevocable contributions to a trust or other funded arrangement 
as required under Sec. 4.171(a)(4), are not normally considered ``bona 
fide'' plans or equivalent benefits for purposes of the Act.
    (2) A contractor may request approval by the Administrator of an 
unfunded self-insured plan in order to allow credit for payments under 
the plan to meet the fringe benefit requirements of the Act. In 
considering whether such a plan is bona fide, the Administrator will 
consider such factors as whether it could be reasonably anticipated to 
provide the prescribed benefits, whether it represents a legally 
enforceable commitment to provide such benefits, whether it is carried 
out under a financially responsible program, and whether the plan has 
been communicated to the employees in writing. The Administrator in his/
her discretion may direct that assets be set aside and preserved in an 
escrow account or that other protections be afforded to meet the plan's 
future obligation.
    (c) No benefit required by any other Federal law or by any State or 
local law, such as unemployment compensation, workers' compensation, or 
social security, is a fringe benefit for purposes of the Act.
    (d) The furnishing to an employee of board, lodging, or other 
facilities under the circumstances described in Sec. 4.167, the cost or 
value of which is creditable toward the monetary wages specified under 
the Act, may not be used to offset any fringe benefit obligations, as 
such items and facilities are not fringe benefits or equivalent benefits 
for purposes of the Act.
    (e) The furnishing of facilities which are primarily for the benefit 
or convenience of the contractor or the cost of which is properly a 
business expense of the contractor is not the furnishing of a ``bona 
fide'' fringe benefit or equivalent benefit or the payment of wages. 
This would be true of such items, for example, as relocation expenses, 
travel and transportation expenses incident to employment, incentive or 
suggestion awards, and recruitment bonuses, as well as tools and other 
materials and services incidental to the employer's performance of the 
contract and the carrying on of his business, and the cost of 
furnishing, laundering, and maintaining uniforms and/or related apparel 
or equipment where employees are required by the contractor, by the 
contractor's Government contract, by law, or by the nature of the work 
to wear such items. See also Sec. 4.168.

[[Page 92]]

    (f) Contributions by contractors for such items as social functions 
or parties for employees, flowers, cards, or gifts on employee 
birthdays, anniversaries, etc. (sunshine funds), employee rest or 
recreation rooms, paid coffee breaks, magazine subscriptions, and 
professional association or club dues, may not be used to offset any 
wages or fringe benefits specified in the contract, as such items are 
not ``bona fide'' wages or fringe benefits or equivalent benefits for 
purposes of the Act.



Sec. 4.172  Meeting requirements for particular fringe benefits--
in general.

    Where a fringe benefit determination specifies the amount of the 
employer's contribution to provide the benefit, the amount specified is 
the actual minimum cash amount that must be provided by the employer for 
the employee. No deduction from the specified amount may be made to 
cover any administrative costs which may be incurred by the contractor 
in providing the benefits, as such costs are properly a business expense 
of the employer. If prevailing fringe benefits for insurance or 
retirement are determined in a stated amount, and the employer provides 
such benefits through contribution in a lesser amount, he will be 
required to furnish the employee with the difference between the amount 
stated in the determination and the actual cost of the benefits which he 
provides. Unless otherwise specified in the particular wage 
determination, such as one reflecting collectively bargained fringe 
benefit requirements, issued pursuant to section 4(c) of the Act, every 
employee performing on a covered contract must be furnished the fringe 
benefits required by that determination for all hours spent working on 
that contract up to a maximum of 40 hours per week and 2,080 (i.e., 52 
weeks of 40 hours each) per year, as these are the typical number of 
nonovertime hours of work in a week, and in a year, respectively. Since 
the Act's fringe benefit requirements are applicable on a contract-by-
contract basis, employees performing on more than one contract subject 
to the Act must be furnished the full amount of fringe benefits to which 
they are entitled under each contract and applicable wage determination. 
Where a fringe benefit determination has been made requiring employer 
contributions for a specified fringe benefit in a stated amount per 
hour, a contractor employing employees part of the time on contract work 
and part of the time on other work, may only credit against the hourly 
amount required for the hours spent on the contract work, the 
corresponding proportionate part of a weekly, monthly, or other amount 
contributed by him for such fringe benefits or equivalent benefits for 
such employees. If, for example, the determination requires health and 
welfare benefits in the amount of 30 cents an hour and the employer 
provides hospitalization insurance for such employees at a cost of 
$10.00 a week, the employer may credit 25 cents an hour ($10.00  40) 
toward his fringe benefit obligation for such employees. If an employee 
works 25 hours on the contract work and 15 hours on other work, the 
employer cannot allocate the entire $10.00 to the 25 hours spent on 
contract work and take credit for 30 cents per hour in that manner, but 
must spread the cost over the full forty hours.



Sec. 4.173  Meeting requirements for vacation fringe benefits.

    (a) Determining length of service for vacation eligibility. It has 
been found that for many types of service contracts performed at Federal 
facilities a successor contractor will utilize the employees of the 
previous contractor in the performance of the contract. The employees 
typically work at the same location providing the same services to the 
same clientele over a period of years, with periodic, often annual, 
changes of employer. The incumbent contractor, when bidding on a 
contract, must consider his liability for vacation benefits for those 
workers in his employ. If prospective contractors who plan to employ the 
same personnel were not required to furnish these employees with the 
same prevailing vacation benefits, it would place the incumbent 
contractor at a distinct competitive disadvantage as well as denying 
such employees entitlement to prevailing vacation benefits.
    (1) Accordingly, most vacation fringe benefit determinations issued 
under

[[Page 93]]

the Act require an employer to furnish to employees working on the 
contract a specified amount of paid vacation upon completion of a 
specified length of service with a contractor or successor. This 
requirement may be stated in the determination, for example, as ``one 
week paid vacation after one year of service with a contractor or 
successor'' or by a determination which calls for ``one week's paid 
vacation after one year of service''. Unless specified otherwise in an 
applicable fringe benefit determination, an employer must take the 
following two factors into consideration in determining when an employee 
has completed the required length of service to be eligible for vacation 
benefits:
    (i) The total length of time spent by an employee in any capacity in 
the continuous service of the present (successor) contractor, including 
both the time spent in performing on regular commercial work and the 
time spent in performing on the Government contract itself, and
    (ii) Where applicable, the total length of time spent in any 
capacity as an employee in the continuous service of any predecessor 
contractor(s) who carried out similar contract functions at the same 
Federal facility.
    (2) The application of these principles may be illustrated by the 
example given above of a fringe benefit determination calling for ``one 
week paid vacation after one year of service with a contractor or 
successor''. In that example, if a contractor has an employee who has 
worked for him for 18 months on regular commercial work and only for 6 
months on a Government service contract, that employee would be eligible 
for the one week vacation since his total service with the employer adds 
up to more than 1 year. Similarly, if a contractor has an employee who 
worked for 16 months under a janitorial service contract at a particular 
Federal base for two different predecessor contractors, and only 8 
months with the present employer, that employee would also be considered 
as meeting the ``after one year of service'' test and would thus be 
eligible for the specified vacation.
    (3) The ``contractor or successor'' requirement set forth in 
paragraph (a)(1) of this section is not affected by the fact that a 
different contracting agency may have contracted for the services 
previously or by the agency's dividing and/or combining the contract 
services. However, prior service as a Federal employee is not counted 
toward an employee's eligibility for vacation benefits under fringe 
benefit determinations issued pursuant to the Act.
    (4) Some fringe benefit determinations may require an employer to 
furnish a specified amount of paid vacation upon completion of a 
specified length of service with the employer, for example, ``one week 
paid vacation after one year of service with an employer''. Under such 
determinations, only the time spent in performing on commercial work and 
on Government contract work in the employment of the present contractor 
need be considered in computing the length of service for purposes of 
determining vacation eligibility.
    (5) Whether or not the predecessor contract(s) was covered by a 
fringe benefit determination is immaterial in determining whether the 
one year of service test has been met. This qualification refers to work 
performed before, as well as after, an applicable fringe benefit 
determination is incorporated into a contract. Also, the fact that the 
labor standards in predecessor service contract(s) were only those 
required under the Fair Labor Standards Act has no effect on the 
applicable fringe benefit determination contained in a current contract.
    (b) Eligibility requirement--continuous service. Under the 
principles set forth above, if an employee's total length of service 
adds up to at least one year, the employee is eligible for vacation with 
pay. However, such service must have been rendered continuously for a 
period of not less than one year for vacation eligibility. The term 
``continuous service'' does not require the combination of two entirely 
separate periods of employment. Whether or not there is a break in the 
continuity of service so as to make an employee ineligible for a 
vacation benefit is dependent upon all the facts in the particular case. 
No fixed time period has been established for determining

[[Page 94]]

whether an employee has a break in service. Rather, as illustrated 
below, the reason(s) for an employee's absence from work is the primary 
factor in determining whether a break in service occurred.
    (1) In cases where employees have been granted leave with or without 
pay by their employer, or are otherwise absent with permission for such 
reasons as sickness or injury, or otherwise perform no work on the 
contract because of reasons beyond their control, there would not be a 
break in service. Likewise, the absence from work for a few days, with 
or without notice, does not constitute a break in service, without a 
formal termination of employment. The following specific examples are 
illustrative situations where it has been determined that a break in 
service did not occur:
    (i) An employee absent for five months due to illness but employed 
continuously for three years.
    (ii) A strike after which employees returned to work.
    (iii) An interim period of three months between contracts caused by 
delays in the procurement process during which time personnel hired 
directly by the Government performed the necessary services. However, 
the successor contractor in this case was not held liable for vacation 
benefits for those employees who had anniversary dates of employment 
during the interim period because no employment relationship existed 
during such period.
    (iv) A mess hall closed three months for renovation. Contractor 
employees were considered to be on temporary layoff during the 
renovation period and did not have a break in service.
    (2) Where an employee quits, is fired for cause, or is otherwise 
terminated (except for temporary layoffs), there would be a break in 
service even if the employee were rehired at a later date. However, an 
employee may not be discharged and rehired as a subterfuge to evade the 
vacation requirement.
    (c) Vesting and payment of vacation benefits. (1) In the example 
given in paragraph (a)(1) of this section of a fringe benefit 
determination calling for ``one week paid vacation after 1 year of 
service with a contractor or successor'', an employee who renders the 
``one year of service'' continuously becomes eligible for the ``one week 
paid vacation'' (i.e., 40 hours of paid vacation, unless otherwise 
specified in an applicable wage determination) upon his anniversary date 
of employment and upon each succeeding anniversary date thereafter. 
However, there is no accrual or vesting of vacation eligibility before 
the employee's anniversary date of employment, and no segment of time 
smaller than one year need be considered in computing the employer's 
vacation liability, unless specifically provided for in a particular 
fringe benefit determination. For example, an employee who has worked 13 
months for an employer subject to such stipulations and is separated 
without receiving any vacation benefit is entitled only to one full 
week's (40 hours) paid vacation. He would not be entitled to the 
additional fraction of one-twelfth of one week's paid vacation for the 
month he worked in the second year unless otherwise stated in the 
applicable wage determination. An employee who has not met the ``one 
year of service'' requirement would not be entitled to any portion of 
the ``one week paid vacation''.
    (2) Eligibility for vacation benefits specified in a particular wage 
determination is based on completion of the stated period of past 
service. The individual employee's anniversary date (and each annual 
anniversary date of employment thereafter) is the reference point for 
vesting of vacation eligibility, but does not necessarily mean that the 
employee must be given the vacation or paid for it on the date on which 
it is vested. The vacation may be scheduled according to a reasonable 
plan mutually agreed to and communicated to the employees. A 
``reasonable'' plan may be interpreted to be a plan which allows the 
employer to maintain uninterrupted contract services but allows the 
employee some choice, by seniority or similar factor, in the scheduling 
of vacations. However, the required vacation must be given or payment 
made in lieu thereof before the next anniversary date, before completion 
of the current contract, or before the employee terminates employment, 
whichever occurs first.

[[Page 95]]

    (d) Contractor liability for vacation benefits. (1) The liability 
for an employee's vacation is not prorated among contractors unless 
specifically provided for under a particular fringe benefit 
determination. The contractor by whom a person is employed at the time 
the vacation right vests, i.e., on the employee's anniversary date of 
employment, must provide the full benefit required by the determination 
which is applicable on that date. For example, an employee, who had not 
previously performed similar contract work at the same facility, was 
first hired by a predecessor contractor on July 1, 1978. July 1 is the 
employee's anniversary date. The predecessor's contract ended June 30, 
1979, but the employee continued working on the contract for the 
successor. Since the employee did not have an anniversary date of 
employment during the predecessor's contract, the predecessor would not 
have any vacation liability with respect to this employee. However, on 
July 1, 1979 the employee's entitlement to the full vacation benefit 
vested and the successor contractor would be liable for the full amount 
of the employee's vacation benefit.
    (2) The requirements for furnishing data relative to employee hiring 
dates in situations where such employees worked for ``predecessor'' 
contractors are set forth in Sec. 4.6. However, a contractor is not 
relieved from any obligation to provide vacation benefits because of any 
difficulty in obtaining such data.
    (e) Rate applicable to computation of vacation benefits. (1) If an 
applicable wage determination requires that the hourly wage rate be 
increased during the period of the contract, the rate applicable to the 
computation of any required vacation benefits is the hourly rate in 
effect in the workweek in which the actual paid vacation is provided or 
the equivalent is paid, as the case may be, and would not be the average 
of the two hourly rates. This rule would not apply to situations where a 
wage determination specified the method of computation and the rate to 
be used.
    (2) As set forth in Sec. 4.172, unless specified otherwise in an 
applicable fringe benefit determination, service employees must be 
furnished the required amount of fringe benefits for all hours paid for 
up to a maximum of 40 hours per week and 2,080 hours per year. Thus, an 
employee on paid vacation leave would accrue and must be compensated for 
any other applicable fringe benefits specified in the fringe benefit 
determination, and if any of the other benefits are furnished in the 
form of cash equivalents, such equivalents must be included with the 
applicable hourly wage rate in computing vacation benefits or a cash 
equivalent therefor. The rules and regulations for computing cash 
equivalents are set forth in Sec. 4.177.



Sec. 4.174  Meeting requirements for holiday fringe benefits.

    (a) Determining eligibility for holiday benefits--in general. (1) 
Most fringe benefit determinations list a specific number of named 
holidays for which payment is required. Unless specified otherwise in an 
applicable determination, an employee who performs any work during the 
workweek in which a named holiday occurs is entitled to the holiday 
benefit, regardless of whether the named holiday falls on a Sunday, 
another day during the workweek on which the employee is not normally 
scheduled to work, or on the employee's day off. In addition, holiday 
benefits cannot be denied because the employee has not been employed by 
the contractor for a designated period prior to the named holiday or 
because the employee did not work the day before or the day after the 
holiday, unless such qualifications are specifically included in the 
determination.
    (2) An employee who performs no work during the workweek in which a 
named holiday occurs is generally not entitled to the holiday benefit. 
However, an employee who performs no work during the workweek because he 
is on paid vacation or sick leave in accordance with the terms of the 
applicable fringe benefit determination is entitled to holiday pay or 
another day off with pay to substitute for the named holiday. In 
addition, an employee who performs no work during the workweek because 
of a layoff does not forfeit his entitlement to holiday benefits if the 
layoff is merely a subterfuge by the

[[Page 96]]

contractor to avoid the payment of such benefits.
    (3) The obligation to furnish holiday pay for the named holiday may 
be discharged if the contractor furnishes another day off with pay in 
accordance with a plan communicated to the employees involved. However, 
in such instances the holidays named in the fringe benefit determination 
are the reference points for determining whether an employee is eligible 
to receive holiday benefits. In other words, if an employee worked in a 
workweek in which a listed holiday occurred, the employee is entitled to 
pay for that holiday. Some determinations may provide for a specific 
number of holidays without naming them. In such instances the contractor 
is free to select the holidays to be taken in accordance with a plan 
communicated to the employees involved, and the agreed-upon holidays are 
the reference points for determining whether an employee is eligible to 
receive holiday benefits.
    (b) Determining eligibility for holiday benefits--newly hired 
employees. The contractor generally is not required to compensate a 
newly hired employee for the holiday occurring prior to the hiring of 
the employee. However, in the one situation where a named holiday falls 
in the first week of a contract, all employees who work during the first 
week would be entitled to holiday pay for that day. For example, if a 
contract to provide services for the period January 1 through December 
31 contained a fringe benefit determination listing New Year's Day as a 
named holiday, and if New Year's Day were officially celebrated on 
January 2 in the year in question because January 1 fell on a Sunday, 
employees hired to begin work on January 3 would be entitled to holiday 
pay for New Year's Day.
    (c) Payment of holiday benefits. (1) A full-time employee who is 
eligible to receive payment for a named holiday must receive a full 
day's pay up to 8 hours unless a different standard is used in the 
fringe benefit determination, such as one reflecting collectively 
bargained holiday benefit requirements issued pursuant to section 4(c) 
of the Act or a different historic practice in an industry or locality. 
Thus, for example, a contractor must furnish 7 hours of holiday pay to a 
full-time employee whose scheduled workday consists of 7 hours. An 
employee whose scheduled workday is 10 hours would be entitled to a 
holiday payment of 8 hours unless a different standard is used in the 
determination. As discussed in Sec. 4.172, such holiday pay must include 
the full amount of other fringe benefits to which the employee is 
entitled.
    (2) Unless a different standard is used in the wage determination, a 
full-time employee who works on the day designated as a holiday must be 
paid, in addition to the amount he ordinarily would be entitled to for 
that day's work, the cash equivalent of a full-day's pay up to 8 hours 
or be furnished another day off with pay.
    (3) If the fringe benefit determination lists the employee's 
birthday as a paid holiday and that day coincides with another listed 
holiday, the contractor may discharge his obligation to furnish payment 
for the second holiday by either substituting another day off with pay 
with the consent of the employee, furnishing holiday benefits of an 
extra day's pay, or if the employee works on the holiday in question, 
furnish holiday benefits of two extra days' pay.
    (4) As stated in paragraph (a)(1) of this section, an employee's 
entitlement to holiday pay fully vests by working in the workweek in 
which the named holiday occurs. Accordingly, any employee who is 
terminated before receiving the full amount of holiday benefits due him 
must be paid the holiday benefits as a final cash payment.
    (5) The rules and regulations for furnishing holiday pay to 
temporary and part-time employees are discussed in Sec. 4.176.
    (6) The rules and regulations for furnishing equivalent fringe 
benefits or cash equivalents in lieu of holiday pay are discussed in 
Sec. 4.177.



Sec. 4.175  Meeting requirements for health, welfare, and/or pension benefits.

    (a) Determining the required amount of benefits. (1) Most fringe 
benefit determinations containing health and welfare and/or pension 
requirements specify a fixed payment per hour on behalf

[[Page 97]]

of each service employee. These payments are usually also stated as 
weekly or monthly amounts. As set forth in Sec. 4.172, unless specified 
otherwise in the applicable determination such payments are due for all 
hours paid for, including paid vacation, sick leave, and holiday hours, 
up to a maximum of 40 hours per week and 2,080 hours per year on each 
contract. The application of this rule can be illustrated by the 
following examples:
    (i) An employee who works 4 days a week, 10 hours a day is entitled 
to 40 hours of health and welfare and/or pension fringe benefits. If an 
employee works 3 days a week, 12 hours a day, then such employee is 
entitled to 36 hours of these benefits.
    (ii) An employee who works 32 hours in a workweek and also receives 
8 hours of holiday pay is entitled to the maximum of 40 hours of health 
and welfare and/or pension payments in that workweek. If the employee 
works more than 32 hours and also received 8 hours of holiday pay, the 
employee is still only entitled to the maximum of 40 hours of health and 
welfare and/or pension payments.
    (iii) If an employee is off work for two weeks on vacation and 
received 80 hours of vacation pay, the employee must also receive 
payment for the 80 hours of health and welfare and/or pension benefits 
which accrue during the vacation period.
    (iv) An employee entitled to two weeks paid vacation who instead 
works the full 52 weeks in the year, receiving the full 2,080 hours 
worth of health and welfare and/or pension benefits, would be due an 
extra 80 hours of vacation pay in lieu of actually taking the vacation; 
however, such an employee would not be entitled to have an additional 80 
hours of health and welfare and/or pension benefits included in his 
vacation pay.
    (2) A fringe benefit determination calling for a specified benefit 
such as health insurance contemplates a fixed and definite contribution 
to a ``bona fide'' plan (as that term is defined in Sec. 4.171) by an 
employer on behalf of each employee, based on the monetary cost to the 
employer rather than on the level of benefits provided. Therefore, in 
determining compliance with an applicable fringe benefit determination, 
the amount of the employer's contribution on behalf of each individual 
employee governs. Thus, as set forth in Sec. 4.172, if a determination 
should require a contribution to a plan providing a specified fringe 
benefit and that benefit can be obtained for less than the required 
contribution, it would be necessary for the employer to make up the 
difference in cash to the employee, or furnish equivalent benefits, or a 
combination thereof. The following illustrates the application of this 
principle: A fringe benefit determination requires a rate of $36.40 per 
month per employee for a health insurance plan. The employer obtains the 
health insurance coverage specified at a rate of $20.45 per month for a 
single employee, $30.60 for an employee with spouse, and $40.90 for an 
employee with a family. The employer is required to make up the 
difference in cash or equivalent benefits to the first two classes of 
employees in order to satisfy the determination, notwithstanding that 
coverage for an employee would be automatically changed by the employer 
if the employee's status should change (e.g., single to married) and 
notwithstanding that the employer's average contribution per employee 
may be equal to or in excess of $36.40 per month.
    (3) In determining eligibility for benefits under certain wage 
determinations containing hours or length of service requirements (such 
as having to work 40 hours in the preceding month), the contractor must 
take into account time spent by employees on commercial work as well as 
time spent on the Government contract.
    (b) Some fringe benefit determinations specifically provide for 
health and welfare and/or pension benefits in terms of average cost. 
Under this concept, a contractor's contributions per employee to a 
``bona fide'' fringe benefit plan are permitted to vary depending upon 
the individual employee's marital or employment status. However, the 
firm's total contributions for all service employees enrolled in the 
plan must average at least the fringe benefit determination requirement 
per hour per service employee. If the contractor's contributions average 
less

[[Page 98]]

than the amount required by the determination, then the firm must make 
up the deficiency by making cash equivalent payments or equivalent 
fringe benefit payments to all service employees in the plan who worked 
on the contract during the payment period. Where such deficiencies are 
made up by means of cash equivalent payments, the payments must be made 
promptly on the following payday. The following illustrates the 
application of this principle: The determination requires an average 
contribution of $0.84 an hour. The contractor makes payments to bona 
fide fringe benefit plans on a monthly basis. During a month the firm 
contributes $15,000 for the service employees employed on the contract 
who are enrolled in the plan, and a total of 20,000 man-hours had been 
worked by all service employees during the month. Accordingly, the 
firm's average cost would have been $15,00020,000 hours or $0.75 per 
hour, resulting in a deficiency of $0.09 per hour. Therefore, the 
contractor owes the service employees in the plan who worked on the 
contract during the month an additional $0.09 an hour for each hour 
worked on the contract, payable on the next regular payday for wages. 
Unless otherwise provided in the applicable wage determination, 
contributions made by the employer for non-service employees may not be 
credited toward meeting Service Contract Act fringe benefit obligations.
    (c) Employees not enrolled in or excluded from participating in 
fringe benefit plans. (1) Some health and welfare and pension plans 
contain eligibility exclusions for certain employees. For example, 
temporary and part-time employees may be excluded from participating in 
such plans. Also, employees receiving benefits through participation in 
plans of an employer other than the Government contractor or by a 
spouse's employer may be prevented from receiving benefits from the 
contractor's plan because of prohibitions against ``double coverage''. 
While such exclusions do not invalidate an otherwise bona fide insurance 
plan, employer contributions to such a plan cannot be considered to be 
made on behalf of the excluded employees. Accordingly, under fringe 
benefit determination requirements as described in paragraph (a)(2) of 
this section, the employees excluded from participation in the health 
insurance plan must be furnished equivalent bona fide fringe benefits or 
be paid a cash equivalent payment during the period that they are not 
eligible to participate in the plan.
    (2) It is not required that all employees participating in a fringe 
benefit plan be entitled to receive benefits from that plan at all 
times. For example, under some plans, newly hired employees who are 
eligible to participate in an insurance plan from their first day of 
employment may be prohibited from receiving benefits from the plan 
during a specified ``waiting period''. Contributions made on behalf of 
such employees would serve to discharge the contractor's obligation to 
furnish the fringe benefit. However, if no contributions are made for 
such employees, no credit may be taken toward the contractor's fringe 
benefit obligations.
    (d) Payment of health and welfare and pension benefits. (1) Health 
and welfare and/or pension payments to a ``bona fide'' insurance plan or 
trust program may be made on a periodic payment basis which is not less 
often than quarterly. However, where fringe benefit determinations 
contemplate a fixed contribution on behalf of each employee, and a 
contractor exercises his option to make hourly cash equivalent or 
differential payments, such payments must be made promptly on the 
regular payday for wages. (See Sec. 4.165.)
    (2) The rules and regulations for furnishing health and welfare and 
pension benefits to temporary and part-time employees are discussed in 
Sec. 4.176.
    (3) The rules and regulations for furnishing equivalent fringe 
benefits or cash equivalents in lieu of health and welfare and pension 
benefits are discussed in Sec. 4.177.



Sec. 4.176  Payment of fringe benefits to temporary and part-time employees.

    (a) As set forth in Sec. 4.165(a)(2), the Act makes no distinction, 
with respect to its compensation provisions, between temporary, part-
time, and full-time employees. Accordingly, in the absence of express 
limitations, the provisions of

[[Page 99]]

an applicable fringe benefit determination apply to all temporary and 
part-time service employees engaged in covered work. However, in 
general, such temporary and part-time employees are only entitled to an 
amount of the fringe benefits specified in an applicable determination 
which is proportionate to the amount of time spent in covered work. The 
application of these principles may be illustrated by the following 
examples:
    (1) Assuming the paid vacation for full-time employees is one week 
of 40 hours, a part-time employee working a regularly scheduled workweek 
of 16 hours is entitled to 16 hours of paid vacation time or its 
equivalent each year, if all other qualifications are met.
    (2) In the case of holidays, a part-time employee working a 
regularly scheduled workweek of 16 hours would be entitled to two-fifths 
of the holiday pay due full-time employees. It is immaterial whether or 
not the holiday falls on a normal workday of the part-time employee. 
Except as provided in Sec. 4.174(b), a temporary or casual employee 
hired during a holiday week, but after the holiday, would be due no 
holiday benefits for that week.
    (3) Holiday or vacation pay obligations to temporary and part-time 
employees working an irregular schedule of hours may be discharged by 
paying such employees a proportion of the holiday or vacation benefits 
due full-time employees based on the number of hours each such employee 
worked in the workweek prior to the workweek in which the holiday occurs 
or, with respect to vacations, the number of hours which the employee 
worked in the year preceding the employee's anniversary date of 
employment. For example:
    (i) An employee works 10 hours during the week preceding July 4, a 
designated holiday. The employee is entitled to 10/40 of the holiday pay 
to which a full-time employee is entitled (i.e., 10/40 times 8 = 2 hours 
holiday pay).
    (ii) A part-time employee works 520 hours during the 12 months 
preceding the employee's anniversary date. Since the typical number of 
nonovertime hours in a year of work is 2,080, if a full-time employee 
would be entitled to one week (40 hours) paid vacation under the 
applicable fringe benefit determination, then the part-time employee 
would be entitled to 520/2,080 times 40 = 10 hours paid vacation.
    (4) A part-time employee working a regularly scheduled workweek of 
20 hours would be entitled to one-half of the health and welfare and/or 
pension benefits specified in the applicable fringe benefit 
determination. Thus, if the determination requires $36.40 per month for 
health insurance, the contractor could discharge his obligation towards 
the employee in question by providing a health insurance policy costing 
$18.20 per month.
    (b) A contractor's obligation to furnish the specified fringe 
benefits to temporary and part-time employees may be discharged by 
furnishing equivalent benefits, cash equivalents, or a combination 
thereof in accordance with the rules and regulations set forth in 
Sec. 4.177.



Sec. 4.177  Discharging fringe benefit obligations by equivalent means.

    (a) In general. (1) Section 2(a)(2) of the Act, which provides for 
fringe benefits that are separate from and in addition to the monetary 
compensation required under section 2(a)(1), permits an employer to 
discharge his obligation to furnish the fringe benefits specified in an 
applicable fringe benefit determination by furnishing any equivalent 
combinations of ``bona fide'' fringe benefits or by making equivalent or 
differential payments in cash. However, credit for such payments is 
limited to the employer's fringe benefit obligations under section 
2(a)(2), since the Act does not authorize any part of the monetary wage 
required by section 2(a)(1) and specified in the wage determination and 
the contract, to be offset by the fringe benefit payments or equivalents 
which are furnished or paid pursuant to section 2(a)(2).
    (2) When a contractor substitutes fringe benefits not specified in 
the fringe benefit determination contained in the contract for fringe 
benefits which are so specified, the substituted fringe benefits, like 
those for which the contract provisions are prescribed, must be ``bona 
fide'' fringe benefits, as that term is defined in Sec. 4.171.
    (3) When a contractor discharges his fringe benefit obligation by 
furnishing,

[[Page 100]]

in lieu of those benefits specified in the applicable fringe benefit 
determination, other ``bona fide'' fringe benefits, cash payments, or a 
combination thereof, the substituted fringe benefits and/or cash 
payments must be ``equivalent'' to the benefits specified in the 
determination. As used in this subpart, the terms equivalent fringe 
benefit and cash equivalent mean equal in terms of monetary cost to the 
contractor. Thus, as set forth in Sec. 4.172, if an applicable fringe 
benefit determination calls for a particular fringe benefit in a stated 
amount and the contractor furnished this benefit through contributions 
in a lesser amount, the contractor must furnish the employee with the 
difference between the amount stated in the determination and the actual 
cost of the benefit which the contractor provides. This principle may be 
illustrated by the example given in Sec. 4.175(a)(2).
    (b) Furnishing equivalent fringe benefits. (1) A contractor's 
obligation to furnish fringe benefits which are stated in a specified 
cash amount may be discharged by furnishing any combination of ``bona 
fide'' fringe benefits costing an equal amount. Thus, if an applicable 
determination specifies that 20 cents per hour is to be paid into a 
pension fund, this fringe benefit obligation will be deemed to be met 
if, instead, hospitalization benefits costing not less than 20 cents per 
hour are provided. The same obligation will be met if hospitalization 
benefits costing 10 cents an hour and life insurance benefits costing 10 
cents an hour are provided. As set forth in Sec. 4.171(c), no benefit 
required to be furnished the employee by any other law, such as workers' 
compensation, may be credited toward satisfying the fringe benefit 
requirements of the Act.
    (2) A contractor who wishes to furnish equivalent fringe benefits in 
lieu of those benefits which are not stated in a specified cash amount, 
such as ``one week paid vacation'', must first determine the equivalent 
cash value of such benefits in accordance with the rules set forth in 
paragraph (c) of this section.
    (c) Furnishing cash equivalents. (1) Fringe benefit obligations may 
be discharged by paying to the employee on his regular payday, in 
addition to the monetary wage required, a cash amount per hour in lieu 
of the specified fringe benefits, provided such amount is equivalent to 
the cost of the fringe benefits required. If, for example, an employee's 
monetary rate under an applicable determination is $4.50 an hour, and 
the fringe benefits to be furnished are hospitalization benefits costing 
20 cents an hour and retirement benefits costing 20 cents an hour, the 
fringe benefit obligation is discharged if instead of furnishing the 
required fringe benefits, the employer pays the employee, in cash, 40 
cents per hour as the cash equivalent of the fringe benefits in addition 
to the $4.50 per hour wage rate required under the applicable wage 
determination.
    (2) The hourly cash equivalent of those fringe benefits which are 
not stated in the applicable determination in terms of hourly cash 
amounts may be obtained by mathematical computation through the use of 
pertinent factors such as the monetary wages paid the employee and the 
hours of work attributable to the period, if any, by which fringe 
benefits are measured in the determination. If the employee's regular 
rate of pay is greater than the minimum monetary wage specified in the 
wage determination and the contract, the former must be used for this 
computation, and if the fringe benefit determination does not specify 
any daily or weekly hours of work by which benefits are to be measured, 
a standard 8-hour day and 40-hour week will be considered applicable. 
The application of these rules in typical situations is illustrated in 
paragraphs (c)(3) through (7) of this section.
    (3) Where fringe benefits are stated as a percentage of the monetary 
rate, the hourly cash equivalent is determined by multiplying the stated 
percentage by the employees' regular or basic (i.e., wage determination) 
rate of pay, whichever is greater. For example, if the determination 
calls for a 5 percent pension fund payment and the employee is paid a 
monetary rate of $4.50 an hour, or if the employee earns $4.50 an hour 
on a piece-work basis in a particular workweek, the cash equivalent of 
that payment would be 22\1/2\ cents an hour.

[[Page 101]]

    (4) If the determination lists a particular fringe benefit in such 
terms as $8 a week, the hourly cash equivalent is determined by dividing 
the amount stated in the determination by the number of working hours to 
which the amount is attributable. For example, if a determination lists 
a fringe benefit as ``pension--$8 a week'', and does not specify weekly 
hours, the hourly cash equivalent is 20 cents per hour, i.e., $8 divided 
by 40, the standard number of non-overtime working hours in a week.
    (5) In determining the hourly cash equivalent of those fringe 
benefits which are not stated in the determination in terms of a cash 
amount, but are stated, for example, as ``nine paid holidays per year'' 
or ``1 week paid vacation after one year of service'', the employee's 
hourly monetary rate of pay is multiplied by the number of hours making 
up the paid holidays or vacation. Unless the hours contemplated in the 
fringe benefit are specified in the determination, a standard 8-hour day 
and 40-hour week is considered applicable. The total annual cost so 
determined is divided by 2,080, the standard number of non-overtime 
hours in a year of work, to arrive at the hourly cash equivalent. This 
principle may be illustrated by the following examples:
    (i) If a particular determination lists as a fringe benefit ``nine 
holidays per year'' and the employee's hourly rate of pay is $4.50, the 
$4.50 is multiplied by 72 (9 days of 8 hours each) and the result, $324, 
is then divided by 2,080 to arrive at the hourly cash equivalent, 
$0.1557 an hour. See Sec. 4.174(c)(4).
    (ii) If the determination requires ``one week paid vacation after 
one year of service'', and the employee's hourly rate of pay is $4.50, 
the $4.50 is multiplied by 40 and the result, $180.00, is then divided 
by 2,080 to arrive at the hourly cash equivalent, $0.0865 an hour.
    (6) Where an employer elects to pay an hourly cash equivalent in 
lieu of a paid vacation, which is computed in accordance with paragraph 
(c)(5) of this section, such payments need commence only after the 
employee has satisfied the ``after one year of service'' requirement. 
However, should the employee terminate employment for any reason before 
receiving the full amount of vested vacation benefits due, the employee 
must be paid the full amount of any difference remaining as the final 
cash payment. For example, an employee becomes eligible for a week's 
vacation pay on March 1. The employer elects to pay this employee an 
hourly cash equivalent beginning that date; the employee terminates 
employment on March 31. Accordingly, as this employee has received only 
\1/12\ of the vacation pay to which he/she is entitled, the employee is 
due the remaining \11/12\ upon termination. As set forth in 
Sec. 4.173(e), the rate applicable to the computation of cash 
equivalents for vacation benefits is the hourly wage rate in effect at 
the time such equivalent payments are actually made.
    (d) Furnishing a combination of equivalent fringe benefits and cash 
payments. Fringe benefit obligations may be discharged by furnishing any 
combination of cash or fringe benefits as illustrated in the preceding 
paragraphs of this section, in monetary amounts the total of which is 
equivalent, under the rules therein stated, to the determined fringe 
benefits specified in the contract. For example, if an applicable 
determination specifies that 20 cents per hour is to be paid into a 
pension fund, this fringe benefit obligation will be deemed to be met if 
instead, hospitalization benefits costing 15 cents an hour and a cash 
equivalent payment of 5 cents an hour are provided.
    (e) Effect of equivalents in computing overtime pay. Section 6 of 
the Act excludes from the regular or basic hourly rate of an employee, 
for purposes of determining the overtime pay to which the employee is 
entitled under any other Federal law, those fringe benefit payments 
computed under the Act which are excluded from the regular rate under 
the Fair Labor Standards Act by provisions of section 7(e) (formerly 
designated as section 7(d)) of that Act (29 U.S.C. 207(e)). Fringe 
benefit payments which qualify for such exclusion are described in 
subpart C of Regulations, 29 CFR part 778. When such fringe benefits are 
required to be furnished to service employees engaged in contract 
performance, the right to compute overtime pay in accordance with the 
above rule is not lost to a contractor or subcontractor because it 
discharges its obligation under this Act to

[[Page 102]]

furnish such fringe benefits through alternative equivalents as provided 
in this section. If it furnishes equivalent benefits or makes cash 
payments, or both, to such an employee as authorized herein, the amounts 
thereof, which discharge the employer's obligation to furnish such 
specified fringe benefits, may be excluded pursuant to this Act from the 
employee's regular or basic rate of pay in computing any overtime pay 
due the employee under any other Federal law. No such exclusion can 
operate, however, to reduce an employee's regular or basic rate of pay 
below the monetary wage rate specified as the applicable minimum wage 
rates under sections 2(a)(1), 2(b), or 4(c) of this Act or under other 
law or an employment contract.



Sec. 4.178  Computation of hours worked.

    Since employees subject to the Act are entitled to the minimum 
compensation specified under its provisions for each hour worked in 
performance of a covered contract, a computation of their hours worked 
in each workweek when such work under the contract is performed is 
essential. Determinations of hours worked will be made in accordance 
with the principles applied under the Fair Labor Standards Act as set 
forth in part 785 of this title which is incorporated herein by 
reference. In general, the hours worked by an employee include all 
periods in which the employee is suffered or permitted to work whether 
or not required to do so, and all time during which the employee is 
required to be on duty or to be on the employer's premises or to be at a 
prescribed workplace. The hours worked which are subject to the 
compensation provisions of the Act are those in which the employee is 
engaged in performing work on contracts subject to the Act. However, 
unless such hours are adequately segregated, as indicated in Sec. 4.179, 
compensation in accordance with the Act will be required for all hours 
of work in any workweek in which the employee performs any work in 
connection with the contract, in the absence of affirmative proof to the 
contrary that such work did not continue throughout the workweek.



Sec. 4.179  Identification of contract work.

    Contractors and subcontractors under contracts subject to the Act 
are required to comply with its compensation requirements throughout the 
period of performance on the contract and to do so with respect to all 
employees who in any workweek are engaged in performing work on such 
contracts. If such a contractor during any workweek is not exclusively 
engaged in performing such contracts, or if while so engaged it has 
employees who spend a portion but not all of their worktime in the 
workweek in performing work on such contracts, it is necessary for the 
contractor to identify accurately in its records, or by other means, 
those periods in each such workweek when the contractor and each such 
employee performed work on such contracts. In cases where contractors 
are not exclusively engaged in Government contract work, and there are 
adequate records segregating the periods in which work was performed on 
contracts subject to the Act from periods in which other work was 
performed, the compensation specified under the Act need not be paid for 
hours spent on non-contract work. However, in the absence of records 
adequately segregating non-covered work from the work performed on or in 
connection with the contract, all employees working in the establishment 
or department where such covered work is performed shall be presumed to 
have worked on or in connection with the contract during the period of 
its performance, unless affirmative proof establishing the contrary is 
presented. Similarly, in the absence of such records, an employee 
performing any work on or in connection with the contract in a workweek 
shall be presumed to have continued to perform such work throughout the 
workweek, unless affirmative proof establishing the contrary is 
presented. Even where a contractor can segregate Government from non-
Government work, it is necessary that the contractor comply with the 
requirements of section 6(e) of the FLSA discussed in Sec. 4.160.

[[Page 103]]

                    Overtime Pay of Covered Employees



Sec. 4.180  Overtime pay--in general.

    The Act does not provide for compensation of covered employees at 
premium rates for overtime hours of work. Section 6 recognizes, however, 
that other Federal laws may require such compensation to be paid to 
employees working on or in connection with contracts subject to the Act 
(see Sec. 4.181) and prescribes, for purposes of such laws, the manner 
in which fringe benefits furnished pursuant to the Act shall be treated 
in computing such overtime compensation as follows: ``In determining any 
overtime pay to which such service employees are entitled under any 
Federal law, the regular or basic hourly rate of such an employee shall 
not include any fringe benefit payments computed hereunder which are 
excluded from the regular rate under the Fair Labor Standards Act by 
provisions of section 7(d) [now section 7(e)] thereof.'' Fringe benefit 
payments which qualify for such exclusion are described in part 778, 
subpart C of this title. The interpretations there set forth will be 
applied in determining the overtime pay to which covered service 
employees are entitled under other Federal statutes. The effect of 
section 6 of the Act in situations where equivalent fringe benefits or 
cash payments are provided in lieu of the specified fringe benefits is 
stated in Sec. 4.177(e) of this part, and illustrated in Sec. 4.182.



Sec. 4.181  Overtime pay provisions of other Acts.

    (a) Fair Labor Standards Act. Although provision has not been made 
for insertion in Government contracts of stipulations requiring 
compliance with the overtime provisions of the Fair Labor Standards Act, 
contractors and subcontractors performing contracts subject to the 
McNamara-O'Hara Service Contract Act may be required to compensate their 
employees working on or in connection with such contracts for overtime 
work pursuant to the overtime pay standards of the Fair Labor Standards 
Act. This is true with respect to employees engaged in interstate or 
foreign commerce or in the production of goods for such commerce 
(including occupations and processes closely related and directly 
essential to such production) and employees employed in enterprises 
which are so engaged, subject to the definitions and exceptions provided 
in such Act. Such employees, except as otherwise specifically provided 
in such Act, must receive overtime compensation at a rate of not less 
than 1\1/2\ times their regular rate of pay for all hours worked in 
excess of the applicable standard in a workweek. See part 778 of this 
title. However, the Fair Labor Standards Act provides no overtime pay 
requirements for employees, not within such interstate commerce coverage 
of the Act, who are subject to its minimum wage provisions only by 
virtue of the provisions of section 6(e), as explained in Sec. 4.180.
    (b) Contract Work Hours and Safety Standards Act. (1) The Contract 
Work Hours and Safety Standards Act (40 U.S.C. 327-332) applies 
generally to Government contracts, including service contracts in excess 
of $100,000, which may require or involve the employment of laborers and 
mechanics. Guards, watchmen, and many other classes of service employees 
are laborers or mechanics within the meaning of such Act. However, 
employees rendering only professional services, seamen, and as a general 
rule those whose work is only clerical or supervisory or nonmanual in 
nature, are not deemed laborers or mechanics for purposes of the Act. 
The wages of every laborer and mechanic for performance of work on such 
contracts must include compensation at a rate not less than 1\1/2\ times 
the employees' basic rate of pay for all hours worked in any workweek in 
excess of 40. Exemptions are provided for certain transportation and 
communications contracts, contracts for the purchase of supplies 
ordinarily available in the open market, and work, required to be done 
in accordance with the provisions of the Walsh-Healey Act.
    (2) Regulations concerning this Act are contained in 29 CFR part 5 
which permit overtime pay to be computed in the same manner as under the 
Fair Labor Standards Act.
    (c) Walsh-Healey Public Contracts Act. As pointed out in Sec. 4.117, 
while some Government contracts may be subject

[[Page 104]]

both to the McNamara-O'Hara Service Contract Act and to the Walsh-Healey 
Public Contracts Act, the employees performing work on the contract 
which is subject to the latter Act are, when so engaged, exempt from the 
provisions of the former. They are, however, subject to the overtime 
provisions of the Walsh-Healey Act if, in any workweek, any of the work 
performed for the employer is subject to such Act and if, in such 
workweek, the total hours worked by the employee for the employer 
(whether wholly or only partly on such work) exceed 40 hours in the 
workweek. In any such workweek the Walsh-Healey Act requires payment of 
overtime compensation at a rate not less than 1\1/2\ times the 
employee's basic rate for such weekly overtime hours. The overtime pay 
provisions of the Walsh-Healey Act are discussed in greater detail in 41 
CFR part 50-201.

[48 FR 49762, Oct. 27, 1983, as amended at 51 FR 12265, Apr. 9, 1986; 61 
FR 40716, Aug. 5, 1996]



Sec. 4.182  Overtime pay of service employees entitled to fringe benefits.

    Reference is made in Sec. 4.180 to the rules prescribed by section 6 
of the Act which permit exclusion of certain fringe benefits and 
equivalents provided pursuant to section 2(a)(2) of the Act from the 
regular or basic rate of pay when computing overtime compensation of a 
service employee under the provisions of any other Federal law. As 
provided in Sec. 4.177, not only those fringe benefits excludable under 
section 6 as benefits determined and specified under section 2(a)(2), 
but also equivalent fringe benefits and cash payments furnished in lieu 
of the specified benefits may be excluded from the regular or basic rate 
of such an employee. The application of this rule may be illustrated by 
the following examples:
    (a) The A company pays a service employee $4.50 an hour in cash 
under a wage determination which requires a monetary rate of not less 
than $4 and a fringe benefit contribution of 50 cents which would 
qualify for exclusion from the regular rate under section 7(e) of the 
Fair Labor Standards Act. The contractor pays the 50 cents in cash 
because he made no contributions for fringe benefits specified in the 
determination and the contract. Overtime compensation in this case would 
be computed on a regular or basic rate of $4 an hour.
    (b) The B company has for some time been paying $4.25 an hour to a 
service employee as his basic cash wage plus 25 cents an hour as a 
contribution to a welfare and pension plan, which contribution qualifies 
for exclusion from the regular rate under the Fair Labor Standards Act. 
For performance of work under a contract subject to the Act a monetary 
rate of $4 and a fringe benefit contribution of 50 cents (also 
qualifying for such exclusion) are specified because they are found to 
be prevailing for such employees in the locality. The contractor may 
credit the 25 cent welfare and pension contribution toward the discharge 
of his fringe benefit obligation under the contract but must also make 
an additional contribution of 25 cents for the specified or equivalent 
fringe benefits or pay the employee an additional 25 cents in cash. 
These contributions or equivalent payments may be excluded from the 
employee's regular rate which remains $4.25, the rate agreed upon as the 
basic cash wage.
    (c) The C company has been paying $4 an hour as its basic cash wage 
on which the firm has been computing overtime compensation. For 
performance of work on a contract subject to the Act the same rate of 
monetary wages and a fringe benefit contribution of 50 cents an hour 
(qualifying for exclusion from the regular rate under the Fair Labor 
Standards Act) are specified in accordance with a determination that 
these are the monetary wages and fringe benefits prevailing for such 
employees in the locality. The contractor is required to continue to pay 
at least $4 an hour in monetary wages and at least this amount must be 
included in the employee's regular or basic rate for overtime purposes 
under applicable Federal law. The fringe benefit obligation under the 
contract would be discharged if 50 cents of the contributions for fringe 
benefits were for the fringe benefits specified in the contract or 
equivalent benefits as defined in Sec. 4.177. The company may exclude 
such fringe benefit contributions from the regular or

[[Page 105]]

basic rate of pay of the service employee in computing overtime pay due.

                           Notice to Employees



Sec. 4.183  Employees must be notified of compensation required.

    The Act, in section 2(a)(4), and the regulations thereunder in 
Sec. 4.6(e), require all contracts subject to the Act which are in 
excess of $2,500 to contain a clause requiring the contractor or 
subcontractor to notify each employee commencing work on a contract to 
which the Act applies of the compensation required to be paid such 
employee under section 2(a)(1) and the fringe benefits required to be 
furnished under section 2(a)(2). A notice form (WH Publication 1313 and 
any applicable wage determination) provided by the Wage and Hour 
Division is to be used for this purpose. It may be delivered to the 
employee or posted as stated in Sec. 4.184.



Sec. 4.184  Posting of notice.

    Posting of the notice provided by the Wage and Hour Division shall 
be in a prominent and accessible place at the worksite, as required by 
Sec. 4.6(e). The display of the notice in a place where it may be seen 
by employees performing on the contract will satisfy the requirement 
that it be in a ``prominent and accessible place''. Should display be 
necessary at more than one site, in order to assure that it is seen by 
such employees, additional copies of the poster may be obtained without 
cost from the Division. The contractor or subcontractor is required to 
notify each employee of the compensation due or attach to the poster any 
applicable wage determination specified in the contract listing all 
minimum monetary wages and fringe benefits to be paid or furnished to 
the classes of service employees performing on the contract.

                                 Records



Sec. 4.185  Recordkeeping requirements.

    The records which a contractor or subcontractor is required to keep 
concerning employment of employees subject to the Act are specified in 
Sec. 4.6(g) of subpart A of this part. They are required to be 
maintained for 3 years from the completion of the work, and must be made 
available for inspection and transcription by authorized representatives 
of the Administrator. Such records must be kept for each service 
employee performing work under the contract, for each workweek during 
the performance of the contract. If the required records are not 
separately kept for the service employees performing on the contract, it 
will be presumed, in the absence of affirmative proof to the contrary, 
that all service employees in the department or establishment where the 
contract was performed were engaged in covered work during the period of 
performance. (See Sec. 4.179.)



Sec. 4.186  [Reserved]



                          Subpart E_Enforcement



Sec. 4.187  Recovery of underpayments.

    (a) The Act, in section 3(a), provides that any violations of any of 
the contract stipulations required by sections 2(a)(1), 2(a)(2), or 2(b) 
of the Act, shall render the party responsible liable for the amount of 
any deductions, rebates, refunds, or underpayments (which includes non-
payment) of compensation due to any employee engaged in the performance 
of the contract. So much of the accrued payments due either on the 
contract or on any other contract (whether subject to the Service 
Contract Act or not) between the same contractor and the Government may 
be withheld in a deposit fund as is necessary to pay the employees. In 
the case of requirements-type contracts, it is the contracting agency, 
and not the using agencies, which has the responsibility for complying 
with a withholding request by the Secretary or authorized 
representative. The Act further provides that on order of the Secretary 
(or authorized representatives), any compensation which the head of the 
Federal agency or the Secretary has found to be due shall be paid 
directly to the underpaid employees from any accrued payments withheld. 
In order to effectuate the efficient administration of this provision of 
the Act, such withheld funds shall be transferred to the Department of 
Labor for

[[Page 106]]

disbursement to the underpaid employees on order of the Secretary or his 
or her authorized representatives, an Administrative Law Judge, or the 
Administrative Review Board, and are not paid directly to such employees 
by the contracting agency without the express prior consent of the 
Department of Labor. (See Decision of the Comptroller General, B-170784, 
February 17, 1971.) It is mandatory for a contracting officer to adhere 
to a request from the Department of Labor to withhold funds where such 
funds are available. (See Decision of the Comptroller General, B-109257, 
October 14, 1952, arising under the Walsh-Healey Act.) Contract funds 
which are or may become due a contractor under any contract with the 
United States may be withheld prior to the institution of administrative 
proceedings by the Secretary. (McCasland v. U.S. Postal Service, 82 CCH 
Labor Cases  33,607 (N.D. N.Y. 1977); G & H Machinery Co. v. Donovan, 
96 CCH Labor Cases  34,354 (S.D. Ill. 1982).)
    (b) Priority to withheld funds. The Comptroller General has afforded 
employee wage claims priority over an Internal Revenue Service levy for 
unpaid taxes. (See Decisions of the Comptroller General, B-170784, 
February 17, 1971; B-189137, August 1, 1977; 56 Comp. Gen. 499 (1977); 
55 Comp. Gen. 744 (1976), arising under the Davis-Bacon Act; B-178198, 
August 30, 1973; B-161460, May 25, 1967.)
    (1) As the Comptroller General has stated, ``[t]he legislative 
histories of these labor statutes [Service Contract Act and Contract 
Work Hours and Safety Standards Act, 41 U.S.C. 327, et seq.] disclose a 
progressive tendency to extend a more liberal interpretation and 
construction in successive enactments with regard to worker's benefits, 
recovery and repayment of wage underpayments. Further, as remedial 
legislation, it is axiomatic that they are to be liberally construed''. 
(Decision of the Comptroller General, B-170784, February 17, 1971.)
    (2) Since section 3(a) of the Act provides that accrued contract 
funds withheld to pay employees wages must be held in a deposit fund, it 
is the position of the Department of Labor that monies so held may not 
be used or set aside for agency reprocurement costs. To hold otherwise 
would be inequitable and contrary to public policy, since the employees 
have performed work from which the Government has received the benefit 
(see National Surety Corporation v. U.S., 132 Ct. Cl. 724, 728, 135 F. 
Supp. 381 (1955), cert. denied, 350 U.S. 902), and to give contracting 
agency reprocurement claims priority would be to require employees to 
pay for the breach of contract between the employer and the agency. The 
Comptroller General has sanctioned priority being afforded wage 
underpayments over the reprocurement costs of the contracting agency 
following a contractor's default or termination for cause. Decision of 
the Comptroller General, B-167000, June 26, 1969; B-178198, August 30, 
1973; and B-189137, August 1, 1977.
    (3) Wage claims have priority over reprocurement costs and tax liens 
without regard to when the competing claims were raised. See Decisions 
of the Comptroller General, B-161460, May 25, 1967; B-189137, August 1, 
1977.
    (4) Wages due workers underpaid on the contract have priority over 
any assignee of the contractor, including assignments made under the 
Assignment of Claims Act, 31 U.S.C. 203, 41 U.S.C. 15, to funds withheld 
under the contract, since an assignee can acquire no greater rights to 
withheld funds than the assignor has in the absence of an assignment. 
See Modern Industrial Bank v. U.S., 101 Ct. Cl. 808 (1944); Royal 
Indemnity Co. v. United States, 178 Ct. Cl. 46, 371 F. 2d 462 (1967), 
cert. denied, 389 U.S. 833; Newark Insurance Co. v. U.S., 149 Ct. Cl. 
170, 181 F. Supp. 246 (1960); Henningsen v. United States Fidelity and 
Guaranty Company, 208 U.S. 404 (1908). Where employees have been 
underpaid, the assignor has no right to assign funds since the assignor 
has no property rights to amounts withheld from the contract to cover 
underpayments of workers which constitute a violation of the law and the 
terms, conditions, and obligations under the contract. (Decision of the 
Comptroller General, B-164881, August 14, 1968; B-178198, August 30, 
1973; 56 Comp. Gen. 499 (1977); 55 Comp. Gen. 744 (1976); The National 
City Bank of Evansville v. United States, 143 Ct. Cl. 154, 163 F. Supp. 
846 (1958); National Surety Corporation v. United

[[Page 107]]

States, 132 Ct. Cl. 724, 135 F. Supp. 381 (1955), cert. denied, 350 U.S. 
902.)
    (5) The Comptroller General, recognizing that unpaid laborers have 
an equitable right to be paid from contract retainages, has also held 
that wage underpayments under the Act have priority over any claim by 
the trustee in bankruptcy. 56 Comp. Gen. 499 (1977), citing Pearlman v. 
Reliance Insurance Company, 371 U.S. 132 (1962); Hadden v. United 
States, 132 Ct. Cl. 529 (1955), in which the courts gave priority to 
sureties who had paid unpaid laborers over the trustee in bankruptcy.
    (c) Section 5(b) of the Act provides that if the accrued payments 
withheld under the terms of the contract are insufficient to reimburse 
all service employees with respect to whom there has been a failure to 
pay the compensation required pursuant to the Act, the United States may 
bring action against the contractor, subcontractor, or any sureties in 
any court of competent jurisdiction to recover the remaining amount of 
underpayments. The Service Contract Act is not subject to the statute of 
limitations in the Portal to Portal Act, 29 U.S.C. 255, and contains no 
prescribed period within which such an action must be instituted; it has 
therefore been held that the general period of six years prescribed by 
28 U.S.C. 2415 applies to such actions, United States of America v. 
Deluxe Cleaners and Laundry, Inc., 511 F. 2d 929 (C.A. 4, 1975). Any 
sums thus recovered by the United States shall be held in the deposit 
fund and shall be paid, on the order of the Secretary, directly to the 
underpaid employees. Any sum not paid to an employee because of 
inability to do so within 3 years shall be covered into the Treasury of 
the United States as miscellaneous receipts.
    (d) Releases or waivers executed by employees for unpaid wages and 
fringe benefits due them are without legal effect. As stated by the 
Supreme Court in Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 704, 
(1945), arising under the Fair Labor Standards Act:

    ``Where a private right is granted in the public interest to 
effectuate a legislative policy, waiver of a right so charged or colored 
with the public interest will not be allowed where it would thwart the 
legislative policy which it was designed to effectuate.''


See also Schulte, Inc. v. Gangi, 328 U.S. 108 (1946); United States v. 
Morley Construction Company, 98 F. 2d 781 (C.A. 2, 1938), cert. denied, 
305 U.S. 651.

Further, as noted above, monies not paid to employees to whom they are 
due because of violation are covered into the U.S. Treasury as provided 
by section 5(b) of the Act.
    (e)(1) The term party responsible for violations in section 3(a) of 
the Act is the same term as contained in the Walsh-Healey Public 
Contracts Act, and therefore, the same principles are applied under both 
Acts. An officer of a corporation who actively directs and supervises 
the contract performance, including employment policies and practices 
and the work of the employees working on the contract, is a party 
responsible and liable for the violations, individually and jointly with 
the company (S & G Coal Sales, Inc., Decision of the Hearing Examiner, 
PC-946, January 21, 1965, affirmed by the Administrator June 8, 1965; 
Tennessee Processing Co., Inc., Decision of the Hearing Examiner, PC-
790, September 28, 1965).
    (2) The failure to perform a statutory public duty under the Service 
Contract Act is not only a corporate liability but also the personal 
liability of each officer charged by reason of his or her corporate 
office while performing that duty. United States v. Sancolmar 
Industries, Inc., 347 F. Supp. 404, 408 (E.D. N.Y. 1972). Accordingly, 
it has been held by administrative decisions and by the courts that the 
term party responsible, as used in section 3(a) of the Act, imposes 
personal liability for violations of any of the contract stipulations 
required by sections 2(a)(1) and (2) and 2(b) of the Act on corporate 
officers who control, or are responsible for control of, the corporate 
entity, as they, individually, have an obligation to assure compliance 
with the requirements of the Act, the regulations, and the contracts. 
See, for example, Waite, Inc., Decision of the ALJ, SCA 530-566, October 
19, 1976, Spruce-Up Corp., Decision of the Administrator SCA 368-370, 
August 19, 1976, Ventilation and Cleaning Engineers, Inc., Decision of 
the ALJ, SCA 176, August 23, 1973, Assistant Secretary, May 17, 1974, 
Secretary, September 27, 1974; Fred Van Elk, Decision

[[Page 108]]

of the ALJ, SCA 254-58, May 28, 1974, Administrator, November 25, 1974; 
Murcole, Inc., Decision of the ALJ, SCA 195-198, April 11, 1974; Emile 
J. Bouchet, Decision of the ALJ, SCA 38, February 24, 1970; Darwyn L. 
Grover, Decision of the ALJ, SCA 485, August 15, 1976; United States v. 
Islip Machine Works, Inc., 179 F. Supp. 585 (E.D. N.Y. 1959); United 
States v. Sancolmar Industries, Inc., 347 F. Supp. 404 (E.D. N.Y. 1972).
    (3) In essence, individual liability attaches to the corporate 
official who is responsible for, and therefore causes or permits, the 
violation of the contract stipulations required by the Act, i.e., 
corporate officers who control the day-to-day operations and management 
policy are personally liable for underpayments because they cause or 
permit violations of the Act.
    (4) It has also been held that the personal responsibility and 
liability of individuals for violations of the Act is not limited to the 
officers of a contracting firm or to signatories to the Government 
contract who are bound by and accept responsibility for compliance with 
the Act and imposition of its sanctions set forth in the contract 
clauses in Sec. 4.6, but includes all persons, irrespective of 
proprietary interest, who exercise control, supervision, or management 
over the performance of the contract, including the labor policy or 
employment conditions regarding the employees engaged in contract 
performance, and who, by action or inaction, cause or permit a contract 
to be breached. U.S. v. Islip Machine Works, Inc., 179 F. Supp. 585 
(E.D. N.Y. 1959); U.S. v. Sancolmar Industries, Inc., 347 F. Supp. 404 
(E.D. N.Y. 1972); Oscar Hestrom Corp., Decision of the Administrator, 
PC-257, May 7, 1946, affirmed, U.S. v. Hedstrom, 8 Wage Hour Cases 302 
(N.D. Ill. 1948); Craddock-Terry Shoe Corp., Decision of the 
Administrator, PC-330, October 3, 1947; Reynolds Research Corp., 
Decision of the Administrator, PC-381, October 24, 1951; Etowah Garment 
Co., Inc., Decision of the Hearing Examiner, PC-632, August 9, 1957, 
Decision of the Administrator, April 29, 1958; Cardinal Fuel and Supply 
Co., Decision of the Hearing Examiner, PC-890, June 17, 1963.
    (5) Reliance on advice from contracting agency officials (or 
Department of Labor officials without the authority to issue rulings 
under the Act) is not a defense against a contractor's liability for 
back wages under the Act. Standard Fabrication Ltd., Decision of the 
Secretary, PC-297, August 3, 1948; Airport Machining Corp., Decision of 
the ALJ, PC-1177, June 15, 1973; James D. West, Decision of the ALJ, SCA 
397-398, November 17, 1975; Metropolitan Rehabilitation Corp., WAB Case 
No. 78-25, August 2, 1979; Fry Brothers Corp., WAB Case No. 76-6, June 
14, 1977.
    (f) The procedures for a contractor or subcontractor to dispute 
findings regarding violations of the Act, including back wage liability 
or the disposition of funds withheld by the agency for such liability, 
are contained in parts 6 and 8 of this title. Appeals in such matters 
have not been delegated to the contracting agencies and such matters 
cannot be appealed under the disputes clause in the contractor's 
contract.
    (g) While the Act provides that action may be brought against a 
surety to recover underpayments of compensation, there is no statutory 
provision requiring that contractors furnish either payment or 
performance bonds before an award can be made. The courts have held, 
however, that when such a bond has been given, including one denominated 
as a performance rather than payment bond, and such a bond guarantees 
that the principal shall fulfill ``all the undertakings, covenants, 
terms, conditions, and agreements'' of the contract, or similar words to 
the same effect, the surety-guarantor is jointly liable for 
underpayments by the contractor of the wages and fringe benefits 
required by the Act up to the amount of the bond. U.S. v. Powers 
Building Maintenance Co., 366 F. Supp. 819 (W.D. Okla. 1972); U.S. v. 
Gillespie, 72 CCH Labor Cases  33,986 (C.D. Cal. 1973) U.S. v. Glens 
Falls Insurance Co., 279 F. Supp. 236 (E.D. Tenn. 1967); United States 
v. Hudgins-Dize Co., 83 F. Supp. 593 (E.D. Va. 1949); U.S. v. 
Continental Casualty Company, 85 F. Supp. 573 (E.D. Pa. 1949), affirmed 
per curiam, 182 F.2d 941 (3rd Cir. 1950).

[[Page 109]]



Sec. 4.188  Ineligibility for further contracts when violations occur.

    (a) Section 5 of the Act provides that any person or firm found by 
the Secretary or the Federal agencies to have violated the Act shall be 
declared ineligible to receive further Federal contracts unless the 
Secretary recommends otherwise because of unusual circumstances. It also 
directs the Comptroller General to distribute a list to all agencies of 
the Government giving the names of persons or firms that have been 
declared ineligible. No contract of the United States or the District of 
Columbia (whether or not subject to the Act) shall be awarded to the 
persons or firms appearing on this list or to any firm, corporation, 
partnership, or association in which such persons or firms have a 
substantial interest until 3 years have elapsed from the date of 
publication of the list containing the names of such persons or firms. 
This prohibition against the award of a contract to an ineligible 
contractor applies to the contractor in its capacity as either a prime 
contractor or a subcontractor. Because the Act contains no provision 
authorizing removal from the list of the names of such persons or firms 
prior to the expiration of the three-year statutory period, the 
Secretary is without authority to accomplish such removal (other than in 
situations involving mistake or legal error). On the other hand, there 
may be situations in which persons or firms already on the list are 
found in a subsequent administrative proceeding to have again violated 
the Act and their debarment ordered. In such circumstances, a new, 
three-year debarment term will commence with the republication of such 
names on the list.
    (b)(1) The term unusual circumstances is not defined in the Act. 
Accordingly, the determination must be made on a case-by-case basis in 
accordance with the particular facts present. It is clear, however, that 
the effect of the 1972 Amendments is to limit the Secretary's discretion 
to relieve violators from the debarred list (H. Rept. 92-1251, 92d 
Cong., 2d Sess. 5; S. Rept. 92-1131, 92d Cong., 2d Sess. 3-4) and that 
the violator of the Act has the burden of establishing the existence of 
unusual circumstances to warrant relief from the debarment sanction, 
Ventilation and Cleaning Engineers, Inc., SCA-176, Administrative Law 
Judge, August 23, 1973, Assistant Secretary, May 22, 1974, Secretary, 
October 2, 1974. It is also clear that unusual circumstances do not 
include any circumstances which would have been insufficient to relieve 
a contractor from the ineligible list prior to the 1972 amendments, or 
those circumstances which commonly exist in cases where violations are 
found, such as negligent or willful disregard of the contract 
requirements and of the Act and regulations, including a contractor's 
plea of ignorance of the Act's requirements where the obligation to 
comply with the Act is plain from the contract, failure to keep 
necessary records and the like. Emerald Maintenance Inc., Supplemental 
Decision of the ALJ, SCA-153, April 5, 1973.
    (2) The Subcommittee report following the oversight hearings 
conducted just prior to the 1972 amendments makes it plain that the 
limitation of the Secretary's discretion through the unusual 
circumstances language was designed in part to prevent the Secretary 
from relieving a contractor from the ineligible list provisions merely 
because the contractor paid what he was required by his contract to pay 
in the first place and promised to comply with the Act in the future. 
See, House Committee on Education and Labor, Special Subcommittee on 
Labor, The Plight of Service Workers under Government Contracts 12-13 
(Comm. Print 1971). As Congressman O'Hara stated: ``Restoration * * * 
[of wages and benefits] is not in and of itself a penalty. The penalty 
for violation is the suspension from the right to bid on Government 
contracts * * *. The authority [to relieve from blacklisting] was 
intended to be used in situations where the violation was a minor one, 
or an inadvertent one, or one in which disbarment * * * would have been 
wholly disproportionate to the offense.'' House Committee on Education 
and Labor, Special Subcommittee on Labor, Hearings on H.R. 6244 and H.R. 
6245, 92d Cong., 1st Sess. 3 (1971).
    (3)(i) The Department of Labor has developed criteria for 
determining when there are unusual circumstances

[[Page 110]]

within the meaning of the Act. See, e.g., Washington Moving & Storage 
Co., Decision of the Assistant Secretary, SCA 68, August 16, 1973, 
Secretary, March 12, 1974; Quality Maintenance Co., Decision of the 
Assistant Secretary, SCA 119, January 11, 1974. Thus, where the 
respondent's conduct in causing or permitting violations of the Service 
Contract Act provisions of the contract is willful, deliberate or of an 
aggravated nature or where the violations are a result of culpable 
conduct such as culpable neglect to ascertain whether practices are in 
violation, culpable disregard of whether they were in violation or not, 
or culpable failure to comply with recordkeeping requirements (such as 
falsification of records), relief from the debarment sanction cannot be 
in order. Furthermore, relief from debarment cannot be in order where a 
contractor has a history of similar violations, where a contractor has 
repeatedly violated the provisions of the Act, or where previous 
violations were serious in nature.
    (ii) A good compliance history, cooperation in the investigation, 
repayment of moneys due, and sufficient assurances of future compliance 
are generally prerequisites to relief. Where these prerequisites are 
present and none of the aggravated circumstances in the preceding 
paragraph exist, a variety of factors must still be considered, 
including whether the contractor has previously been investigated for 
violations of the Act, whether the contractor has committed 
recordkeeping violations which impeded the investigation, whether 
liability was dependent upon resolution of a bona fide legal issue of 
doubtful certainty, the contractor's efforts to ensure compliance, the 
nature, extent, and seriousness of any past or present violations, 
including the impact of violations on unpaid employees, and whether the 
sums due were promptly paid.
    (4) A contractor has an affirmative obligation to ensure that its 
pay practices are in compliance with the Act, and cannot itself resolve 
questions which arise, but rather must seek advice from the Department 
of Labor. Murcole, Inc., Decision of the ALJ, SCA 195-198, April 10, 
1974; McLaughlin Storage, Inc., Decision of the ALJ, SCA 362-365, 
November 5, 1975, Administrator, March 25, 1976; Able Building & 
Maintenance & Service Co., Decision of the ALJ, SCA 389-390, May 29, 
1975, Assistant Secretary, January 13, 1976; Aarid Van Lines, Inc., 
Decision of the Administrator, SCA 423-425, May 13, 1977.
    (5) Furthermore, a contractor cannot be relieved from debarment by 
attempting to shift his/her responsibility to subordinate employees. 
Security Systems, Inc., Decision of the ALJ, SCA 774-775, April 10, 
1978; Ventilation & Cleaning Engineers, Inc., Decision of the Secretary, 
SCA 176, September 27, 1974; Ernest Roman, Decision of the Secretary, 
SCA 275, May 6, 1977. As the Comptroller General has stated in 
considering debarment under the Davis-Bacon Act, ``[n]egligence of the 
employer to instruct his employees as to the proper method of performing 
his work or to see that the employee obeys his instructions renders the 
employer liable for injuries to third parties resulting therefrom. * * * 
The employer will be liable for acts of his employee within the scope of 
the employment regardless of whether the acts were expressly or 
impliedly authorized. * * * Willful and malicious acts of the employee 
are imputable to the employer under the doctrine of respondeat superior 
although they might not have been consented to or expressly authorized 
or ratified by the employer.'' (Decision of the Comptroller General, B-
145608, August 1, 1961.)
    (6) Negligence per se does not constitute unusual circumstances. 
Relief on no basis other than negligence would render the effect of 
section 5(a) a nullity, since it was intended that only responsible 
bidders be awarded Government contracts. Greenwood's Transfer & Storage, 
Inc., Decision of the Secretary, SCA 321-326, June 1, 1976; Ventilation 
& Cleaning Engineers, Inc., Decision of the Secretary, SCA 176, 
September 27, 1974.
    (c) Similarly, the term substantial interest is not defined in the 
Act. Accordingly, this determination, too, must be made on a case-by-
case basis in light of the particular facts, and cognizant of the 
legislative intent ``to provide to service employees safeguards similar 
to those given to employees covered by the Walsh-Healey Public Contracts

[[Page 111]]

Act''. Federal Food Services, Inc., Decision of the ALJ, SCA 585-592, 
November 22, 1977. Thus, guidance can be obtained from cases arising 
under the Walsh-Healey Act, which uses the concept ``controlling 
interest''. See Regal Mfg. Co., Decision of the Administrator, PC-245, 
March 1, 1946; Acme Sportswear Co., Decision of the Hearing Examiner, 
PC-275, May 8, 1946; Gearcraft, Inc., Decision of the ALJ, PCX-1, May 3, 
1972. In a supplemental decision of February 23, 1979, in Federal Food 
Services, Inc. the Judge ruled as a matter of law that the term ``does 
not preclude every employment or financial relationship between a party 
under sanction and another * * * [and that] it is necessary to look 
behind titles, payments, and arrangements and examine the existing 
circumstances before reaching a conclusion in this matter.''
    (1) Where a person or firm has a direct or beneficial ownership or 
control of more than 5 percent of any firm, corporation, partnership, or 
association, a ``substantial interest'' will be deemed to exist. 
Similarly, where a person is an officer or director in a firm or the 
debarred firm shares common management with another firm, a 
``substantial interest'' will be deemed to exist. Furthermore, wherever 
a firm is an affiliate as defined in Sec. 4.1a(g) of subpart A, a 
``substantial interest'' will be deemed to exist, or where a debarred 
person forms or participates in another firm in which he/she has 
comparable authority, he/she will be deemed to have a ``substantial 
interest'' in the new firm and such new firm would also be debarred 
(Etowah Garment Co., Inc., Decision of the Hearing Examiner, PC-632, 
August 9, 1957).
    (2) Nor is interest determined by ownership alone. A debarred person 
will also be deemed to have a ``substantial interest'' in a firm if such 
person has participated in contract negotiations, is a signatory to a 
contract, or has the authority to establish, control, or manage the 
contract performance and/or the labor policies of a firm. A 
``substantial interest'' may also be deemed to exist, in other 
circumstances, after consideration of the facts of the individual case. 
Factors to be examined include, among others, sharing of common premises 
or facilities, occupying any position such as manager, supervisor, or 
consultant to, any such entity, whether compensated on a salary, bonus, 
fee, dividend, profit-sharing, or other basis of remuneration, including 
indirect compensation by virtue of family relationships or otherwise. A 
firm will be particularly closely examined where there has been an 
attempt to sever an association with a debarred firm or where the firm 
was formed by a person previously affiliated with the debarred firm or a 
relative of the debarred person.
    (3) Firms with such identity of interest with a debarred person or 
firm will be placed on the debarred bidders list after the determination 
is made pursuant to procedures in Sec. 4.12 and parts 6 and 8 of this 
title. Where a determination of such ``substantial interest'' is made 
after the initiation of the debarment period, contracting agencies are 
to terminate any contract with such firm entered into after the 
initiation of the original debarment period since all persons or firms 
in which the debarred person or firm has a substantial interest were 
also ineligible to receive Government contracts from the date of 
publication of the violating person's or firm's name on the debarred 
bidders list.



Sec. 4.189  Administrative proceedings relating to enforcement of
labor standards.

    The Secretary is authorized pursuant to the provisions of section 
4(a) of the Act to hold hearings and make decisions based upon findings 
of fact as are deemed to be necessary to enforce the provisions of the 
Act. Pursuant to section 4(a) of the Act, the Secretary's findings of 
fact after notice and hearing are conclusive upon all agencies of the 
United States and, if supported by the preponderance of the evidence, 
conclusive in any court of the United States, without a trial de novo. 
United States v. Powers Building Maintenance Co., 336 F. Supp. 819 (W.D. 
Okla. 1972). Rules of practice for administrative proceedings are set 
forth in parts 6 and 8 of this title.



Sec. 4.190  Contract cancellation.

    (a) As provided in section 3 of the Act, where a violation is found 
of any

[[Page 112]]

contract stipulation, the contract is subject upon written notice to 
cancellation by the contracting agency, whereupon the United States may 
enter into other contracts or arrangements for the completion of the 
original contract, charging any additional cost to the original 
contractor.
    (b) Every contractor shall certify pursuant to Sec. 4.6(n) of 
subpart A that it is not disqualified for the award of a contract by 
virtue of its name appearing on the debarred bidders list or because any 
such currently listed person or firm has a substantial interest in said 
contractor, as described in Sec. 4.188. Upon discovery of such false 
certification or determination of substantial interest in a firm 
performing on a Government contract, as the case may be, the contract is 
similarly subject upon written notice to immediate cancellation by the 
contracting agency and any additional cost for the completion of the 
contract charged to the original contractor as specified in paragraph 
(a). Such contract is without warrant of law and has no force and effect 
and is void ab initio, 33 Comp Gen. 63; Decision of the Comptroller 
General, B-115051, August 6, 1953. Furthermore, any profit derived from 
said illegal contract is forfeited (Paisner v. U.S., 138 Ct. Cl. 420, 
150 F. Supp. 835 (1957), cert. denied, 355 U.S. 941).



Sec. 4.191  Complaints and compliance assistance.

    (a) Any employer, employee, labor or trade organization, contracting 
agency, or other interested person or organization may report to any 
office of the Wage and Hour Division (or to any office of the 
Occupational Safety and Health Administration, in instances involving 
the safety and health provisions), a violation, or apparent violation, 
of the Act, or of any of the rules or regulations prescribed thereunder. 
Such offices are also available to assist or provide information to 
contractors or subcontractors desiring to insure that their practices 
are in compliance with the Act. Information furnished is treated 
confidentially. It is the policy of the Department of Labor to protect 
the identity of its confidential sources and to prevent an unwarranted 
invasion of personal privacy. Accordingly, the identity of an employee 
who makes a confidential written or oral statement as a complaint or in 
the course of an investigation, as well as portions of the statement 
which would reveal his identity, will not be disclosed without the prior 
consent of the employee. Disclosure of employee statements shall be 
governed by the provisions of the ``Freedom of Information Act'' (5 
U.S.C. 552, see 29 CFR part 70) and the ``Privacy Act of 1974'' (5 
U.S.C. 552a).
    (b) A report of breach or violation relating solely to safety and 
health requirements may be in writing and addressed to the Regional 
Administrator of an Occupational Safety and Health Administration 
Regional Office, U.S. Department of Labor, or to the Assistant Secretary 
for Occupational Safety and Health, U.S. Department of Labor, 
Washington, DC 20210.
    (c) Any other report of breach or violation may be in writing and 
addressed to the Assistant Regional Administrator of a Wage and Hour 
Division's regional office, U.S. Department of Labor, or to the 
Administrator of the Wage and Hour Division, U.S. Department of Labor, 
Washington, DC 20210.
    (d) In the event that an Assistant Regional Administrator for the 
Wage and Hour Division, is notified of a breach or violation which also 
involves safety and health standards, the Regional Administrator of the 
Wage and Hour Division shall notify the appropriate Regional 
Administrator of the Occupational Safety and Health Administration who 
shall with respect to the safety and health violations take action 
commensurate with his responsibilities pertaining to safety and health 
standards.
    (e) Any report should contain the following:
    (1) The full name and address of the person or organization 
reporting the breach or violations.
    (2) The full name and address of the person against whom the report 
is made.
    (3) A clear and concise statement of the facts constituting the 
alleged breach or violation of any of the provisions of the McNamara-
O'Hara Service

[[Page 113]]

Contract Act, or of any of the rules or regulations prescribed 
thereunder.

[48 FR 49762, Oct. 27, 1983, as amended at 82 FR 2225, Jan. 9, 2017]



 PART 5_LABOR STANDARDS PROVISIONS APPLICABLE TO CONTRACTS COVERING 
 FEDERALLY FINANCED AND ASSISTED CONSTRUCTION (ALSO LABOR STANDARDS 
 PROVISIONS APPLICABLE TO NONCONSTRUCTION CONTRACTS SUBJECT TO THE
 CONTRACT WORK HOURS AND SAFETY STANDARDS ACT)--Table of Contents



    Subpart A_Davis-Bacon and Related Acts Provisions and Procedures

Sec.
5.1  Purpose and scope.
5.2  Definitions.
5.3-5.4  [Reserved]
5.5  Contract provisions and related matters.
5.6  Enforcement.
5.7  Reports to the Secretary of Labor.
5.8  Liquidated damages under the Contract Work Hours and Safety 
          Standards Act.
5.9  Suspension of funds.
5.10  Restitution, criminal action.
5.11  Disputes concerning payment of wages.
5.12  Debarment proceedings.
5.13  Rulings and interpretations.
5.14  Variations, tolerances, and exemptions from parts 1 and 3 of this 
          subtitle and this part.
5.15  Limitations, variations, tolerances, and exemptions under the 
          Contract Work Hours and Safety Standards Act.
5.16  Training plans approved or recognized by the Department of Labor 
          prior to August 20, 1975.
5.17  Withdrawal of approval of a training program.

Subpart B_Interpretation of the Fringe Benefits Provisions of the Davis-
                                Bacon Act

5.20  Scope and significance of this subpart.
5.21  [Reserved]
5.22  Effect of the Davis-Bacon fringe benefits provisions.
5.23  The statutory provisions.
5.24  The basic hourly rate of pay.
5.25  Rate of contribution or cost for fringe benefits.
5.26  ``* * * contribution irrevocably made * * * to a trustee or to a 
          third person''.
5.27  ``* * * fund, plan, or program.''
5.28  Unfunded plans.
5.29  Specific fringe benefits.
5.30  Types of wage determinations.
5.31  Meeting wage determination obligations.
5.32  Overtime payments.

    Authority: 5 U.S.C. 301; R.S. 161, 64 Stat. 1267; Reorganization 
Plan No. 14 of 1950, 5 U.S.C. appendix; 40 U.S.C. 3141 et seq.; 40 
U.S.C. 3145; 40 U.S.C. 3148; 40 U.S.C. 3701 et seq.; and the laws listed 
in 5.1(a) of this part; Secretary's Order No. 01-2014 (Dec. 19, 2014), 
79 FR 77527 (Dec. 24, 2014); 28 U.S.C. 2461 note (Federal Civil 
Penalties Inflation Adjustment Act of 1990); Pub. L. 114-74 at Sec. 701, 
129 Stat 584.

    Source: 48 FR 19541, Apr. 29, 1983, unless otherwise noted.



    Subpart A_Davis-Bacon and Related Acts Provisions and Procedures

    Source: 48 FR 19540, Apr. 29, 1983, unless otherwise noted.

    Editorial Note: Nomenclature changes to subpart A of part 5 appear 
at 61 FR 19984, May 3, 1996.



Sec. 5.1  Purpose and scope.

    (a) The regulations contained in this part are promulgated under the 
authority conferred upon the Secretary of Labor by Reorganization Plan 
No. 14 of 1950 and the Copeland Act in order to coordinate the 
administration and enforcement of the labor standards provisions of each 
of the following acts by the Federal agencies responsible for their 
administration and of such additional statutes as may from time to time 
confer upon the Secretary of Labor additional duties and 
responsibilities similar to those conferred upon the Secretary of Labor 
under Reorganization Plan No. 14 of 1950:

    1. The Davis-Bacon Act (sec. 1-7, 46 Stat. 1949, as amended; Pub. L. 
74-403, 40 U.S.C. 276a-276a-7).
    2. Copeland Act (40 U.S.C. 276c).
    3. The Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
332).
    4. National Housing Act (sec. 212 added to c. 847, 48 Stat. 1246, by 
sec. 14, 53 Stat. 807; 12 U.S.C. 1715c and repeatedly amended).
    5. Housing Act of 1950 (college housing) (amended by Housing Act of 
1959 to add labor provisions, 73 Stat. 681; 12 U.S.C. 1749a(f)).
    6. Housing Act of 1959 (sec. 401(f) of the Housing Act of 1950 as 
amended by Pub. L. 86-372, 73 Stat. 681; 12 U.S.C. 1701q(c)(3)).
    7. Commercial Fisheries Research and Development Act of 1964 (sec. 
7, 78 Stat. 199; 16 U.S.C. 779e(b)).

[[Page 114]]

    8. Library Services and Construction Act (sec. 7(a), 78 Stat. 13; 20 
U.S.C. 355c(a)(4), as amended).
    9. National Technical Institute for the Deaf Act (sec. 5(b)(5), 79 
Stat. 126; 20 U.S.C. 684(b)(5)).
    10. National Foundation on the Arts and Humanities Act of 1965 (sec. 
5(k), 79 Stat. 846 as amended; 20 U.S.C. 954(j)).
    11. Elementary and Secondary Education Act of 1965 as amended by 
Elementary and Secondary and other Education Amendments of 1969 (sec. 
423 as added by Pub. L. 91-230, title IV, sec. 401(a)(10), 84 Stat. 169, 
and renumbered sec. 433, by Pub. L. 92-318; title III, sec. 301(a)(1), 
86 Stat. 326; 20 U.S.C. 1232(b)). Under the amendment coverage is 
extended to all programs administered by the Commissioner of Education.
    12. The Federal-Aid Highway Acts (72 Stat. 895, as amended by 82 
Stat. 821; 23 U.S.C. 113, as amended by the Surface Transportation 
Assistance Act of 1982, Pub. L. 97-424).
    13. Indian Self-Determination and Education Assistance Act (sec. 7, 
88 Stat. 2205; 25 U.S.C. 450e).
    14. Indian Health Care Improvement Act (sec. 303(b), 90 Stat. 1407; 
25 U.S.C. 1633(b)).
    15. Rehabilitation Act of 1973 (sec. 306(b)(5) 87 Stat. 384, 29 
U.S.C. 776(b)(5)).
    16. Comprehensive Employment and Training Act of 1973 (sec. 606, 87 
Stat. 880, renumbered sec. 706 by 88 Stat. 1845; 29 U.S.C. 986; also 
sec. 604, 88 Stat. 1846; 29 U.S.C. 964(b)(3)).
    17. State and Local Fiscal Assistance Act of 1972 (sec. 123(a)(6), 
86 Stat. 933; 31 U.S.C. 1246(a)(6)).
    18. Federal Water Pollution Control Act (sec. 513 of sec. 2, 86 
Stat. 894; 33 U.S.C. 1372).
    19. Veterans Nursing Home Care Act of 1964 (78 Stat. 502, as 
amended; 38 U.S.C. 5035(a)(8)).
    20. Postal Reorganization Act (sec. 410(b)(4)(C); 84 Stat. 726 as 
amended; 39 U.S.C. 410(b)(4)(C)).
    21. National Visitors Center Facilities Act of 1966 (sec. 110, 32 
Stat. 45; 40 U.S.C. 808).
    22. Appalachian Regional Development Act of 1965 (sec. 402, 79 Stat. 
21; 40 U.S.C. App. 402).
    23. Health Services Research, Health Statistics, and Medical 
Libraries Act of 1974 (sec. 107, see sec. 308(h)(2) thereof, 88 Stat. 
370, as amended by 90 Stat. 378; 42 U.S.C. 242m(h)(2)).
    24. Hospital Survey and Construction Act, as amended by the Hospital 
and Medical Facilities Amendments of 1964 (sec. 605(a)(5), 78 Stat. 453; 
42 U.S.C. 291e(a)(5)).
    25. Health Professions Educational Assistance Act (sec. 303(b), 90 
Stat. 2254; 42 U.S.C. 293a(g)(1)(C); also sec. 308a, 90 Stat. 2258, 42 
U.S.C. 293a(c)(7)).
    26. Nurse Training Act of 1964 (sec. 941(a)(1)(C), 89 Stat. 384; 42 
U.S.C. 296a(b)(5)).
    27. Heart Disease, Cancer, and Stroke Amendments of 1965 (sec. 904, 
as added by sec. 2, 79 Stat. 928; 42 U.S.C. 299d(b)(4)).
    28. Safe Drinking Water Act (sec. 2(a) see sec. 1450e thereof, 88 
Stat. 1691; 42 U.S.C. 300j-9(e)).
    29. National Health Planning and Resources Act (sec. 4, see sec. 
1604(b)(1)(H), 88 Stat. 2261, 42 U.S.C. 300o-3(b)(1)(H)).
    30. U.S. Housing Act of 1937, as amended and recodified (88 Stat. 
667; 42 U.S.C. 1437j).
    31. Demonstration Cities and Metropolitan Development Act of 1966 
(secs. 110, 311, 503, 1003, 80 Stat. 1259, 1270, 1277, 1284; 42 U.S.C. 
3310; 12 U.S.C. 1715c; 42 U.S.C. 1437j).
    32. Slum clearance program: Housing Act of 1949 (sec. 109, 63 Stat. 
419, as amended; 42 U.S.C. 1459).
    33. Farm housing: Housing Act of 1964 (adds sec. 516(f) to Housing 
Act of 1949 by sec. 503, 78 Stat. 797; 42 U.S.C. 1486(f)).
    34. Housing Act of 1961 (sec. 707, added by sec. 907, 79 Stat. 496, 
as amended; 42 U.S.C. 1500c-3).
    35. Defense Housing and Community Facilities and Services Act of 
1951 (sec. 310, 65 Stat. 307; 42 U.S.C. 1592i).
    36. Special Health Revenue Sharing Act of 1975 (sec. 303, see sec. 
222(a)(5) thereof, 89 Stat. 324; 42 U.S.C. 2689j(a)(5)).
    37. Economic Opportunity Act of 1964 (sec. 607, 78 Stat. 532; 42 
U.S.C. 2947).
    38. Headstart, Economic Opportunity, and Community Partnership Act 
of 1974 (sec. 11, see sec. 811 thereof, 88 Stat. 2327; 42 U.S.C. 2992a).
    39. Housing and Urban Development Act of 1965 (sec. 707, 79 Stat. 
492 as amended; 42 U.S.C. 3107).
    40. Older Americans Act of 1965 (sec. 502, Pub. L. 89-73, as amended 
by sec. 501, Pub. L. 93-29; 87 Stat. 50; 42 U.S.C. 3041a(a)(4)).
    41. Public Works and Economic Development Act of 1965 (sec. 712; 79 
Stat. 575 as amended; 42 U.S.C. 3222).
    42. Juvenile Delinquency Prevention Act (sec. 1, 86 Stat. 536; 42 
U.S.C. 3884).
    43. New Communities Act of 1968 (sec. 410, 82 Stat. 516; 42 U.S.C. 
3909).
    44. Urban Growth and New Community Development Act of 1970 (sec. 
727(f), 84 Stat. 1803; 42 U.S.C. 4529).
    45. Domestic Volunteer Service Act of 1973 (sec. 406, 87 Stat. 410; 
42 U.S.C. 5046).
    46. Housing and Community Development Act of 1974 (secs. 110, 
802(g), 88 Stat. 649, 724; 42 U.S.C. 5310, 1440(g)).
    47. Developmentally Disabled Assistance and Bill of Rights Act (sec. 
126(4), 89 Stat. 488; 42 U.S.C. 6042(4); title I, sec. 111, 89 Stat. 
491; 42 U.S.C. 6063(b)(19)).
    48. National Energy Conservation Policy Act (sec. 312, 92 Stat. 
3254; 42 U.S.C. 6371j).
    49. Public Works Employment Act of 1976 (sec. 109, 90 Stat. 1001; 42 
U.S.C. 6708; also sec. 208, 90 Stat. 1008; 42 U.S.C. 6728).

[[Page 115]]

    50. Energy Conservation and Production Act (sec. 451(h), 90 Stat. 
1168; 42 U.S.C. 6881(h)).
    51. Solid Waste Disposal Act (sec. 2, 90 Stat. 2823; 42 U.S.C. 
6979).
    52. Rail Passenger Service Act of 1970 (sec. 405d, 84 Stat. 1337; 45 
U.S.C. 565(d)).
    53. Urban Mass Transportation Act of 1964 (sec. 10, 78 Stat. 307; 
renumbered sec. 13 by 88 Stat. 715; 49 U.S.C. 1609).
    54. Highway Speed Ground Transportation Study (sec. 6(b), 79 Stat. 
893; 49 U.S.C. 1636(b)).
    55. Airport and Airway Development Act of 1970 (sec. 22(b), 84 Stat. 
231; 49 U.S.C. 1722(b)).
    56. Federal Civil Defense Act of 1950 (50 U.S.C. App. 2281i).
    57. National Capital Transportation Act of 1965 (sec. 3(b)(4), 79 
Stat. 644; 40 U.S.C. 682(b)(4).

    Note. Repealed December 9, 1969, and labor standards incorporated in 
sec. 1-1431 of the District of Columbia Code).

    58. Model Secondary School for the Deaf Act (sec. 4, 80 Stat. 1027, 
Pub. L. 89-694, but not in the United States Code).
    59. Delaware River Basin Compact (sec. 15.1, 75 Stat. 714, Pub. L. 
87-328) (considered a statute for purposes of the plan but not in the 
United States Code).
    60. Energy Security Act (sec. 175(c), Pub. L. 96-294, 94 Stat. 611; 
42 U.S.C. 8701 note).

    (b) Part 1 of this subtitle contains the Department's procedural 
rules governing requests for wage determinations and the issuance and 
use of such wage determinations under the Davis-Bacon Act and its 
related statutes as listed in that part.



Sec. 5.2  Definitions.

    (a) The term Secretary includes the Secretary of Labor, the Deputy 
Under Secretary for Employment Standards, and their authorized 
representatives.
    (b) The term Administrator means the Administrator of the Wage and 
Hour Division, U.S. Department of Labor, or authorized representative.
    (c) The term Federal agency means the agency or instrumentality of 
the United States which enters into the contract or provides assistance 
through loan, grant, loan guarantee or insurance, or otherwise, to the 
project subject to a statute listed in Sec. 5.1.
    (d) The term Agency Head means the principal official of the Federal 
agency and includes those persons duly authorized to act in the behalf 
of the Agency Head.
    (e) The term Contracting Officer means the individual, a duly 
appointed successor, or authorized representative who is designated and 
authorized to enter into contracts on behalf of the Federal agency.
    (f) The term labor standards as used in this part means the 
requirements of the Davis-Bacon Act, the Contract Work Hours and Safety 
Standards Act (other than those relating to safety and health), the 
Copeland Act, and the prevailing wage provisions of the other statutes 
listed in Sec. 5.1, and the regulations in parts 1 and 3 of this 
subtitle and this part.
    (g) The term United States or the District of Columbia means the 
United States, the District of Columbia, and all executive departments, 
independent establishments, administrative agencies, and 
instrumentalities of the United States and of the District of Columbia, 
including corporations, all or substantially all of the stock of which 
is beneficially owned by the United States, by the foregoing 
departments, establishments, agencies, instrumentalities, and including 
nonappropriated fund instrumentalities.
    (h) The term contract means any prime contract which is subject 
wholly or in part to the labor standards provisions of any of the acts 
listed in Sec. 5.1 and any subcontract of any tier thereunder, let under 
the prime contract. A State or local Government is not regarded as a 
contractor under statutes providing loans, grants, or other Federal 
assistance in situations where construction is performed by its own 
employees. However, under statutes requiring payment of prevailing wages 
to all laborers and mechanics employed on the assisted project, such as 
the U.S. Housing Act of 1937, State and local recipients of Federal-aid 
must pay these employees according to Davis-Bacon labor standards.
    (i) The terms building or work generally include construction 
activity as distinguished from manufacturing, furnishing of materials, 
or servicing and maintenance work. The terms include without limitation, 
buildings, structures, and improvements of all types,

[[Page 116]]

such as bridges, dams, plants, highways, parkways, streets, subways, 
tunnels, sewers, mains, power lines, pumping stations, heavy generators, 
railways, airports, terminals, docks, piers, wharves, ways, lighthouses, 
buoys, jetties, breakwaters, levees, canals, dredging, shoring, 
rehabilitation and reactivation of plants, scaffolding, drilling, 
blasting, excavating, clearing, and landscaping. The manufacture or 
furnishing of materials, articles, supplies or equipment (whether or not 
a Federal or State agency acquires title to such materials, articles, 
supplies, or equipment during the course of the manufacture or 
furnishing, or owns the materials from which they are manufactured or 
furnished) is not a building or work within the meaning of the 
regulations in this part unless conducted in connection with and at the 
site of such a building or work as is described in the foregoing 
sentence, or under the United States Housing Act of 1937 and the Housing 
Act of 1949 in the construction or development of the project.
    (j) The terms construction, prosecution, completion, or repair mean 
the following:
    (1) All types of work done on a particular building or work at the 
site thereof, including work at a facility which is deemed a part of the 
site of the work within the meaning of (paragraph (l) of this section by 
laborers and mechanics employed by a construction contractor or 
construction subcontractor (or, under the United States Housing Act of 
1937; the Housing Act of 1949; and the Native American Housing 
Assistance and Self-Determination Act of 1996, all work done in the 
construction or development of the project), including without 
limitation--
    (i) Altering, remodeling, installation (where appropriate) on the 
site of the work of items fabricated off-site;
    (ii) Painting and decorating;
    (iii) Manufacturing or furnishing of materials, articles, supplies 
or equipment on the site of the building or work (or, under the United 
States Housing Act of 1937; the Housing Act of 1949; and the Native 
American Housing Assistance and Self-Determination Act of 1996 in the 
construction or development of the project);
    (iv)(A) Transportation between the site of the work within the 
meaning of paragraph (l)(1) of this section and a facility which is 
dedicated to the construction of the building or work and deemed a part 
of the site of the work within the meaning of paragraph (l)(2) of this 
section; and
    (B) Transportation of portion(s) of the building or work between a 
site where a significant portion of such building or work is 
constructed, which is a part of the site of the work within the meaning 
of paragraph (l)(1) of this section, and the physical place or places 
where the building or work will remain.
    (2) Except for laborers and mechanics employed in the construction 
or development of the project under the United States Housing Act of 
1937; the Housing Act of 1949; and the Native American Housing 
Assistance and Self-Determination Act of 1996, and except as provided in 
paragraph (j)(1)(iv)(A) of this section, the transportation of materials 
or supplies to or from the site of the work by employees of the 
construction contractor or a construction subcontractor is not 
``construction, prosecution, completion, or repair'' (see Building and 
Construction Trades Department, AFL-CIO v. United States Department of 
Labor Wage Appeals Board (Midway Excavators, Inc.), 932 F.2d 985 (D.C. 
Cir. 1991)).
    (k) The term public building or public work includes building or 
work, the construction, prosecution, completion, or repair of which, as 
defined above, is carried on directly by authority of or with funds of a 
Federal agency to serve the interest of the general public regardless of 
whether title thereof is in a Federal agency.
    (l) The term site of the work is defined as follows:
    (1) The site of the work is the physical place or places where the 
building or work called for in the contract will remain; and any other 
site where a significant portion of the building or work is constructed, 
provided that such site is established specifically for the performance 
of the contract or project;
    (2) Except as provided in paragraph (l)(3) of this section, job 
headquarters, tool yards, batch plants, borrow pits,

[[Page 117]]

etc., are part of the site of the work, provided they are dedicated 
exclusively, or nearly so, to performance of the contract or project, 
and provided they are adjacent or virtually adjacent to the site of the 
work as defined in paragraph (l)(1) of this section;
    (3) Not included in the site of the work are permanent home offices, 
branch plant establishments, fabrication plants, tool yards, etc., of a 
contractor or subcontractor whose location and continuance in operation 
are determined wholly without regard to a particular Federal or 
federally assisted contract or project. In addition, fabrication plants, 
batch plants, borrow pits, job headquarters, tool yards, etc., of a 
commercial or material supplier, which are established by a supplier of 
materials for the project before opening of bids and not on the site of 
the work as stated in paragraph (l)(1) of this section, are not included 
in the site of the work. Such permanent, previously established 
facilities are not part of the site of the work, even where the 
operations for a period of time may be dedicated exclusively, or nearly 
so, to the performance of a contract.
    (m) The term laborer or mechanic includes at least those workers 
whose duties are manual or physical in nature (including those workers 
who use tools or who are performing the work of a trade), as 
distinguished from mental or managerial. The term laborer or mechanic 
includes apprentices, trainees, helpers, and, in the case of contracts 
subject to the Contract Work Hours and Safety Standards Act, watchmen or 
guards. The term does not apply to workers whose duties are primarily 
administrative, executive, or clerical, rather than manual. Persons 
employed in a bona fide executive, administrative, or professional 
capacity as defined in part 541 of this title are not deemed to be 
laborers or mechanics. Working foremen who devote more than 20 percent 
of their time during a workweek to mechanic or laborer duties, and who 
do not meet the criteria of part 541, are laborers and mechanics for the 
time so spent.
    (n) The terms apprentice, trainee, and helper are defined as 
follows:
    (1) Apprentice means (i) a person employed and individually 
registered in a bona fide apprenticeship program registered with the 
U.S. Department of Labor, Employment and Training Administration, Office 
of Apprenticeship Training, Employer and Labor Services, or with a State 
Apprenticeship Agency recognized by the Bureau, or (ii) a person in the 
first 90 days of probationary employment as an apprentice in such an 
apprenticeship program, who is not individually registered in the 
program, but who has been certified by the Office of Apprenticeship 
Training, Employer and Labor Services or a State Apprenticeship Agency 
(where appropriate) to be eligible for probationary employment as an 
apprentice;
    (2) Trainee means a person registered and receiving on-the-job 
training in a construction occupation under a program which has been 
approved in advance by the U.S. Department of Labor, Employment and 
Training Administration, as meeting its standards for on-the-job 
training programs and which has been so certified by that 
Administration.
    (3) These provisions do not apply to apprentices and trainees 
employed on projects subject to 23 U.S.C. 113 who are enrolled in 
programs which have been certified by the Secretary of Transportation in 
accordance with 23 U.S.C. 113(c).
    (4) A distinct classification of ``helper'' will be issued in wage 
determinations applicable to work performed on construction projects 
covered by the labor standards provisions of the Davis-Bacon and Related 
Acts only where:
    (i) The duties of the helper are clearly defined and distinct from 
those of any other classification on the wage determination;
    (ii) The use of such helpers is an established prevailing practice 
in the area; and
    (iii) The helper is not employed as a trainee in an informal 
training program. A ``helper'' classification will be added to wage 
determinations pursuant to Sec. 5.5(a)(1)(ii)(A) only where, in 
addition, the work to be performed by the helper is not performed by a 
classification in the wage determination.
    (o) Every person performing the duties of a laborer or mechanic in 
the

[[Page 118]]

construction, prosecution, completion, or repair of a public building or 
public work, or building or work financed in whole or in part by loans, 
grants, or guarantees from the United States is employed regardless of 
any contractual relationship alleged to exist between the contractor and 
such person.
    (p) The term wages means the basic hourly rate of pay; any 
contribution irrevocably made by a contractor or subcontractor to a 
trustee or to a third person pursuant to a bona fide fringe benefit 
fund, plan, or program; and the rate of costs to the contractor or 
subcontractor which may be reasonably anticipated in providing bona fide 
fringe benefits to laborers and mechanics pursuant to an enforceable 
commitment to carry out a financially responsible plan of program, which 
was communicated in writing to the laborers and mechanics affected. The 
fringe benefits enumerated in the Davis-Bacon Act include 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 foregoing; unemployment benefits; life insurance, 
disability insurance, sickness insurance, or accident insurance; 
vacation or holiday pay; defraying costs of apprenticeship or other 
similar programs; or other bona fide fringe benefits. Fringe benefits do 
not include benefits required by other Federal, State, or local law.
    (q) The term wage determination includes the original decision and 
any subsequent decisions modifying, superseding, correcting, or 
otherwise changing the provisions of the original decision. The 
application of the wage determination shall be in accordance with the 
provisions of Sec. 1.6 of this title.

[48 FR 19541, Apr. 29, 1983, as amended at 48 FR 50313, Nov. 1, 1983; 55 
FR 50149, Dec. 4, 1990; 57 FR 19206, May 4, 1992; 65 FR 69693, Nov. 20, 
2000; 65 FR 80278, Dec. 20, 2000; 82 FR 2225, Jan. 9, 2017]



Secs. 5.3-5.4  [Reserved]



Sec. 5.5  Contract provisions and related matters.

    (a) The Agency head shall cause or require the contracting officer 
to insert in full in any contract in excess of $2,000 which is entered 
into for the actual construction, alteration and/or repair, including 
painting and decorating, of a public building or public work, or 
building or work financed in whole or in part from Federal funds or in 
accordance with guarantees of a Federal agency or financed from funds 
obtained by pledge of any contract of a Federal agency to make a loan, 
grant or annual contribution (except where a different meaning is 
expressly indicated), and which is subject to the labor standards 
provisions of any of the acts listed in Sec. 5.1, the following clauses 
(or any modifications thereof to meet the particular needs of the 
agency, Provided, That such modifications are first approved by the 
Department of Labor):
    (1) Minimum wages. (i) All laborers and mechanics employed or 
working upon the site of the work (or under the United States Housing 
Act of 1937 or under the Housing Act of 1949 in the construction or 
development of the project), will be paid unconditionally and not less 
often than once a week, and without subsequent deduction or rebate on 
any account (except such payroll deductions as are permitted by 
regulations issued by the Secretary of Labor under the Copeland Act (29 
CFR part 3)), the full amount of wages and bona fide fringe benefits (or 
cash equivalents thereof) due at time of payment computed at rates not 
less than those contained in the wage determination of the Secretary of 
Labor which is attached hereto and made a part hereof, regardless of any 
contractual relationship which may be alleged to exist between the 
contractor and such laborers and mechanics. Contributions made or costs 
reasonably anticipated for bona fide fringe benefits under section 
1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are 
considered wages paid to such laborers or mechanics, subject to the 
provisions of paragraph (a)(1)(iv) of this section; also, regular 
contributions made or costs incurred for more than a weekly period (but 
not less often than quarterly) under plans, funds, or programs which 
cover the particular weekly period, are deemed to be constructively made 
or incurred

[[Page 119]]

during such weekly period. Such laborers and mechanics shall be paid the 
appropriate wage rate and fringe benefits on the wage determination for 
the classification of work actually performed, without regard to skill, 
except as provided in Sec. 5.5(a)(4). Laborers or mechanics performing 
work in more than one classification may be compensated at the rate 
specified for each classification for the time actually worked therein: 
Provided, That the employer's payroll records accurately set forth the 
time spent in each classification in which work is performed. The wage 
determination (including any additional classification and wage rates 
conformed under paragraph (a)(1)(ii) of this section) and the Davis-
Bacon poster (WH-1321) shall be posted at all times by the contractor 
and its subcontractors at the site of the work in a prominent and 
accessible place where it can be easily seen by the workers.
    (ii)(A) The contracting officer shall require that any class of 
laborers or mechanics, including helpers, which is not listed in the 
wage determination and which is to be employed under the contract shall 
be classified in conformance with the wage determination. The 
contracting officer shall approve an additional classification and wage 
rate and fringe benefits therefore only when the following criteria have 
been met:
    (1) The work to be performed by the classification requested is not 
performed by a classification in the wage determination; and
    (2) The classification is utilized in the area by the construction 
industry; and
    (3) The proposed wage rate, including any bona fide fringe benefits, 
bears a reasonable relationship to the wage rates contained in the wage 
determination.
    (B) If the contractor and the laborers and mechanics to be employed 
in the classification (if known), or their representatives, and the 
contracting officer agree on the classification and wage rate (including 
the amount designated for fringe benefits where appropriate), a report 
of the action taken shall be sent by the contracting officer to the 
Administrator of the Wage and Hour Division, U.S. Department of Labor, 
Washington, DC 20210. The Administrator, or an authorized 
representative, will approve, modify, or disapprove every additional 
classification action within 30 days of receipt and so advise the 
contracting officer or will notify the contracting officer within the 
30-day period that additional time is necessary.
    (C) In the event the contractor, the laborers or mechanics to be 
employed in the classification or their representatives, and the 
contracting officer do not agree on the proposed classification and wage 
rate (including the amount designated for fringe benefits, where 
appropriate), the contracting officer shall refer the questions, 
including the views of all interested parties and the recommendation of 
the contracting officer, to the Administrator for determination. The 
Administrator, or an authorized representative, will issue a 
determination within 30 days of receipt and so advise the contracting 
officer or will notify the contracting officer within the 30-day period 
that additional time is necessary.
    (D) The wage rate (including fringe benefits where appropriate) 
determined pursuant to paragraphs (a)(1)(ii) (B) or (C) of this section, 
shall be paid to all workers performing work in the classification under 
this contract from the first day on which work is performed in the 
classification.
    (iii) Whenever the minimum wage rate prescribed in the contract for 
a class of laborers or mechanics includes a fringe benefit which is not 
expressed as an hourly rate, the contractor shall either pay the benefit 
as stated in the wage determination or shall pay another bona fide 
fringe benefit or an hourly cash equivalent thereof.
    (iv) If the contractor does not make payments to a trustee or other 
third person, the contractor may consider as part of the wages of any 
laborer or mechanic the amount of any costs reasonably anticipated in 
providing bona fide fringe benefits under a plan or program, Provided, 
That the Secretary of Labor has found, upon the written request of the 
contractor, that the applicable standards of the Davis-Bacon Act have 
been met. The Secretary of Labor may require the contractor to set aside 
in a separate account assets for the

[[Page 120]]

meeting of obligations under the plan or program.
    (2) Withholding. The (write in name of Federal Agency or the loan or 
grant recipient) shall upon its own action or upon written request of an 
authorized representative of the Department of Labor withhold or cause 
to be withheld from the contractor under this contract or any other 
Federal contract with the same prime contractor, or any other federally-
assisted contract subject to Davis-Bacon prevailing wage requirements, 
which is held by the same prime contractor, so much of the accrued 
payments or advances as may be considered necessary to pay laborers and 
mechanics, including apprentices, trainees, and helpers, employed by the 
contractor or any subcontractor the full amount of wages required by the 
contract. In the event of failure to pay any laborer or mechanic, 
including any apprentice, trainee, or helper, employed or working on the 
site of the work (or under the United States Housing Act of 1937 or 
under the Housing Act of 1949 in the construction or development of the 
project), all or part of the wages required by the contract, the 
(Agency) may, after written notice to the contractor, sponsor, 
applicant, or owner, take such action as may be necessary to cause the 
suspension of any further payment, advance, or guarantee of funds until 
such violations have ceased.
    (3) Payrolls and basic records. (i) Payrolls and basic records 
relating thereto shall be maintained by the contractor during the course 
of the work and preserved for a period of three years thereafter for all 
laborers and mechanics working at the site of the work (or under the 
United States Housing Act of 1937, or under the Housing Act of 1949, in 
the construction or development of the project). Such records shall 
contain the name, address, and social security number of each such 
worker, his or her correct classification, hourly rates of wages paid 
(including rates of contributions or costs anticipated for bona fide 
fringe benefits or cash equivalents thereof of the types described in 
section 1(b)(2)(B) of the Davis-Bacon Act), daily and weekly number of 
hours worked, deductions made and actual wages paid. Whenever the 
Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the wages 
of any laborer or mechanic include the amount of any costs reasonably 
anticipated in providing benefits under a plan or program described in 
section 1(b)(2)(B) of the Davis-Bacon Act, the contractor shall maintain 
records which show that the commitment to provide such benefits is 
enforceable, that the plan or program is financially responsible, and 
that the plan or program has been communicated in writing to the 
laborers or mechanics affected, and records which show the costs 
anticipated or the actual cost incurred in providing such benefits. 
Contractors employing apprentices or trainees under approved programs 
shall maintain written evidence of the registration of apprenticeship 
programs and certification of trainee programs, the registration of the 
apprentices and trainees, and the ratios and wage rates prescribed in 
the applicable programs.
    (ii)(A) The contractor shall submit weekly for each week in which 
any contract work is performed a copy of all payrolls to the (write in 
name of appropriate federal agency) if the agency is a party to the 
contract, but if the agency is not such a party, the contractor will 
submit the payrolls to the applicant, sponsor, or owner, as the case may 
be, for transmission to the (write in name of agency). The payrolls 
submitted shall set out accurately and completely all of the information 
required to be maintained under 29 CFR 5.5(a)(3)(i), except that full 
social security numbers and home addresses shall not be included on 
weekly transmittals. Instead the payrolls shall only need to include an 
individually identifying number for each employee (e.g., the last four 
digits of the employee's social security number). The required weekly 
payroll information may be submitted in any form desired. Optional Form 
WH-347 is available for this purpose from the Wage and Hour Division Web 
site at http://www.dol.gov/esa/whd/forms/wh347instr.htm or its successor 
site. The prime contractor is responsible for the submission of copies 
of payrolls by all subcontractors. Contractors and subcontractors shall 
maintain the full social security number and current address of each 
covered

[[Page 121]]

worker, and shall provide them upon request to the (write in name of 
appropriate federal agency) if the agency is a party to the contract, 
but if the agency is not such a party, the contractor will submit them 
to the applicant, sponsor, or owner, as the case may be, for 
transmission to the (write in name of agency), the contractor, or the 
Wage and Hour Division of the Department of Labor for purposes of an 
investigation or audit of compliance with prevailing wage requirements. 
It is not a violation of this section for a prime contractor to require 
a subcontractor to provide addresses and social security numbers to the 
prime contractor for its own records, without weekly submission to the 
sponsoring government agency (or the applicant, sponsor, or owner).
    (B) Each payroll submitted shall be accompanied by a ``Statement of 
Compliance,'' signed by the contractor or subcontractor or his or her 
agent who pays or supervises the payment of the persons employed under 
the contract and shall certify the following:
    (1) That the payroll for the payroll period contains the information 
required to be provided under Sec. 5.5 (a)(3)(ii) of Regulations, 29 CFR 
part 5, the appropriate information is being maintained under Sec. 5.5 
(a)(3)(i) of Regulations, 29 CFR part 5, and that such information is 
correct and complete;
    (2) That each laborer or mechanic (including each helper, 
apprentice, and trainee) employed on the contract during the payroll 
period has been paid the full weekly wages earned, without rebate, 
either directly or indirectly, and that no deductions have been made 
either directly or indirectly from the full wages earned, other than 
permissible deductions as set forth in Regulations, 29 CFR part 3;
    (3) That each laborer or mechanic has been paid not less than the 
applicable wage rates and fringe benefits or cash equivalents for the 
classification of work performed, as specified in the applicable wage 
determination incorporated into the contract.
    (C) The weekly submission of a properly executed certification set 
forth on the reverse side of Optional Form WH-347 shall satisfy the 
requirement for submission of the ``Statement of Compliance'' required 
by paragraph (a)(3)(ii)(B) of this section.
    (D) The falsification of any of the above certifications may subject 
the contractor or subcontractor to civil or criminal prosecution under 
section 1001 of title 18 and section 231 of title 31 of the United 
States Code.
    (iii) The contractor or subcontractor shall make the records 
required under paragraph (a)(3)(i) of this section available for 
inspection, copying, or transcription by authorized representatives of 
the (write the name of the agency) or the Department of Labor, and shall 
permit such representatives to interview employees during working hours 
on the job. If the contractor or subcontractor fails to submit the 
required records or to make them available, the Federal agency may, 
after written notice to the contractor, sponsor, applicant, or owner, 
take such action as may be necessary to cause the suspension of any 
further payment, advance, or guarantee of funds. Furthermore, failure to 
submit the required records upon request or to make such records 
available may be grounds for debarment action pursuant to 29 CFR 5.12.
    (4) Apprentices and trainees--(i) Apprentices. Apprentices will be 
permitted to work at less than the predetermined rate for the work they 
performed when they are employed pursuant to and individually registered 
in a bona fide apprenticeship program registered with the U.S. 
Department of Labor, Employment and Training Administration, Office of 
Apprenticeship Training, Employer and Labor Services, or with a State 
Apprenticeship Agency recognized by the Office, or if a person is 
employed in his or her first 90 days of probationary employment as an 
apprentice in such an apprenticeship program, who is not individually 
registered in the program, but who has been certified by the Office of 
Apprenticeship Training, Employer and Labor Services or a State 
Apprenticeship Agency (where appropriate) to be eligible for 
probationary employment as an apprentice. The allowable ratio of 
apprentices to journeymen on the job site in any craft classification 
shall not be greater than the ratio permitted to the contractor as to 
the entire work force under the registered program. Any

[[Page 122]]

worker listed on a payroll at an apprentice wage rate, who is not 
registered or otherwise employed as stated above, shall be paid not less 
than the applicable wage rate on the wage determination for the 
classification of work actually performed. In addition, any apprentice 
performing work on the job site in excess of the ratio permitted under 
the registered program shall be paid not less than the applicable wage 
rate on the wage determination for the work actually performed. Where a 
contractor is performing construction on a project in a locality other 
than that in which its program is registered, the ratios and wage rates 
(expressed in percentages of the journeyman's hourly rate) specified in 
the contractor's or subcontractor's registered program shall be 
observed. Every apprentice must be paid at not less than the rate 
specified in the registered program for the apprentice's level of 
progress, expressed as a percentage of the journeymen hourly rate 
specified in the applicable wage determination. Apprentices shall be 
paid fringe benefits in accordance with the provisions of the 
apprenticeship program. If the apprenticeship program does not specify 
fringe benefits, apprentices must be paid the full amount of fringe 
benefits listed on the wage determination for the applicable 
classification. If the Administrator determines that a different 
practice prevails for the applicable apprentice classification, fringes 
shall be paid in accordance with that determination. In the event the 
Office of Apprenticeship Training, Employer and Labor Services, or a 
State Apprenticeship Agency recognized by the Office, withdraws approval 
of an apprenticeship program, the contractor will no longer be permitted 
to utilize apprentices at less than the applicable predetermined rate 
for the work performed until an acceptable program is approved.
    (ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not 
be permitted to work at less than the predetermined rate for the work 
performed unless they are employed pursuant to and individually 
registered in a program which has received prior approval, evidenced by 
formal certification by the U.S. Department of Labor, Employment and 
Training Administration. The ratio of trainees to journeymen on the job 
site shall not be greater than permitted under the plan approved by the 
Employment and Training Administration. Every trainee must be paid at 
not less than the rate specified in the approved program for the 
trainee's level of progress, expressed as a percentage of the journeyman 
hourly rate specified in the applicable wage determination. Trainees 
shall be paid fringe benefits in accordance with the provisions of the 
trainee program. If the trainee program does not mention fringe 
benefits, trainees shall be paid the full amount of fringe benefits 
listed on the wage determination unless the Administrator of the Wage 
and Hour Division determines that there is an apprenticeship program 
associated with the corresponding journeyman wage rate on the wage 
determination which provides for less than full fringe benefits for 
apprentices. Any employee listed on the payroll at a trainee rate who is 
not registered and participating in a training plan approved by the 
Employment and Training Administration shall be paid not less than the 
applicable wage rate on the wage determination for the classification of 
work actually performed. In addition, any trainee performing work on the 
job site in excess of the ratio permitted under the registered program 
shall be paid not less than the applicable wage rate on the wage 
determination for the work actually performed. In the event the 
Employment and Training Administration withdraws approval of a training 
program, the contractor will no longer be permitted to utilize trainees 
at less than the applicable predetermined rate for the work performed 
until an acceptable program is approved.
    (iii) Equal employment opportunity. The utilization of apprentices, 
trainees and journeymen under this part shall be in conformity with the 
equal employment opportunity requirements of Executive Order 11246, as 
amended, and 29 CFR part 30.
    (5) Compliance with Copeland Act requirements. The contractor shall 
comply with the requirements of 29 CFR part 3, which are incorporated by 
reference in this contract.

[[Page 123]]

    (6) Subcontracts. The contractor or subcontractor shall insert in 
any subcontracts the clauses contained in 29 CFR 5.5(a)(1) through (10) 
and such other clauses as the (write in the name of the Federal agency) 
may by appropriate instructions require, and also a clause requiring the 
subcontractors to include these clauses in any lower tier subcontracts. 
The prime contractor shall be responsible for the compliance by any 
subcontractor or lower tier subcontractor with all the contract clauses 
in 29 CFR 5.5.
    (7) Contract termination: debarment. A breach of the contract 
clauses in 29 CFR 5.5 may be grounds for termination of the contract, 
and for debarment as a contractor and a subcontractor as provided in 29 
CFR 5.12.
    (8) Compliance with Davis-Bacon and Related Act requirements. All 
rulings and interpretations of the Davis-Bacon and Related Acts 
contained in 29 CFR parts 1, 3, and 5 are herein incorporated by 
reference in this contract.
    (9) Disputes concerning labor standards. Disputes arising out of the 
labor standards provisions of this contract shall not be subject to the 
general disputes clause of this contract. Such disputes shall be 
resolved in accordance with the procedures of the Department of Labor 
set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of 
this clause include disputes between the contractor (or any of its 
subcontractors) and the contracting agency, the U.S. Department of 
Labor, or the employees or their representatives.
    (10) Certification of eligibility. (i) By entering into this 
contract, the contractor certifies that neither it (nor he or she) nor 
any person or firm who has an interest in the contractor's firm is a 
person or firm ineligible to be awarded Government contracts by virtue 
of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).
    (ii) No part of this contract shall be subcontracted to any person 
or firm ineligible for award of a Government contract by virtue of 
section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).
    (iii) The penalty for making false statements is prescribed in the 
U.S. Criminal Code, 18 U.S.C. 1001.
    (b) Contract Work Hours and Safety Standards Act. The Agency Head 
shall cause or require the contracting officer to insert the following 
clauses set forth in paragraphs (b)(1), (2), (3), and (4) of this 
section in full in any contract in an amount in excess of $100,000 and 
subject to the overtime provisions of the Contract Work Hours and Safety 
Standards Act. These clauses shall be inserted in addition to the 
clauses required by Sec. 5.5(a) or Sec. 4.6 of part 4 of this title. As 
used in this paragraph, the terms laborers and mechanics include 
watchmen and guards.
    (1) Overtime requirements. No contractor or subcontractor 
contracting for any part of the conract work which may require or 
involve the employment of laborers or mechanics shall require or permit 
any such laborer or mechanic in any workweek in which he or she is 
employed on such work to work in excess of forty hours in such workweek 
unless such laborer or mechanic receives compensation at a rate not less 
than one and one-half times the basic rate of pay for all hours worked 
in excess of forty hours in such workweek.
    (2) Violation; liability for unpaid wages; liquidated damages. In 
the event of any violation of the clause set forth in paragraph (b)(1) 
of this section the contractor and any subcontractor responsible 
therefor shall be liable for the unpaid wages. In addition, such 
contractor and subcontractor shall be liable to the United States (in 
the case of work done under contract for the District of Columbia or a 
territory, to such District or to such territory), for liquidated 
damages. Such liquidated damages shall be computed with respect to each 
individual laborer or mechanic, including watchmen and guards, employed 
in violation of the clause set forth in paragraph (b)(1) of this 
section, in the sum of $25 for each calendar day on which such 
individual was required or permitted to work in excess of the standard 
workweek of forty hours without payment of the overtime wages required 
by the clause set forth in paragraph (b)(1) of this section.
    (3) Withholding for unpaid wages and liquidated damages. The (write 
in the name of the Federal agency or the loan or grant recipient) shall 
upon its own action or upon written request of an

[[Page 124]]

authorized representative of the Department of Labor withhold or cause 
to be withheld, from any moneys payable on account of work performed by 
the contractor or subcontractor under any such contract or any other 
Federal contract with the same prime contractor, or any other federally-
assisted contract subject to the Contract Work Hours and Safety 
Standards Act, which is held by the same prime contractor, such sums as 
may be determined to be necessary to satisfy any liabilities of such 
contractor or subcontractor for unpaid wages and liquidated damages as 
provided in the clause set forth in paragraph (b)(2) of this section.
    (4) Subcontracts. The contractor or subcontractor shall insert in 
any subcontracts the clauses set forth in paragraph (b)(1) through (4) 
of this section and also a clause requiring the subcontractors to 
include these clauses in any lower tier subcontracts. The prime 
contractor shall be responsible for compliance by any subcontractor or 
lower tier subcontractor with the clauses set forth in paragraphs (b)(1) 
through (4) of this section.
    (c) In addition to the clauses contained in paragraph (b), in any 
contract subject only to the Contract Work Hours and Safety Standards 
Act and not to any of the other statutes cited in Sec. 5.1, the Agency 
Head shall cause or require the contracting officer to insert a clause 
requiring that the contractor or subcontractor shall maintain payrolls 
and basic payroll records during the course of the work and shall 
preserve them for a period of three years from the completion of the 
contract for all laborers and mechanics, including guards and watchmen, 
working on the contract. Such records shall contain the name and address 
of each such employee, social security number, correct classifications, 
hourly rates of wages paid, daily and weekly number of hours worked, 
deductions made, and actual wages paid. Further, the Agency Head shall 
cause or require the contracting officer to insert in any such contract 
a clause providing that the records to be maintained under this 
paragraph shall be made available by the contractor or subcontractor for 
inspection, copying, or transcription by authorized representatives of 
the (write the name of agency) and the Department of Labor, and the 
contractor or subcontractor will permit such representatives to 
interview employees during working hours on the job.

(The information collection, recordkeeping, and reporting requirements 
contained in the following paragraphs of this section were approved by 
the Office of Management and Budget:

------------------------------------------------------------------------
                                                            OMB Control
                        Paragraph                               No.
------------------------------------------------------------------------
(a)(1)(ii)(B)...........................................       1235-0023
(a)(1)(ii)(C)...........................................       1235-0023
(a)(1)(iv)..............................................       1235-0023
(a)(3)(i)...............................................       1235-0023
(a)(3)(ii)(A)...........................................       1235-0023
                                                               1235-0008
(c).....................................................       1235-0023
------------------------------------------------------------------------


[48 FR 19540, Apr. 29, 1983, as amended at 51 FR 12265, Apr. 9, 1986; 55 
FR 50150, Dec. 4, 1990; 57 FR 28776, June 26, 1992; 58 FR 58955, Nov. 5, 
1993; 61 FR 40716, Aug. 5, 1996; 65 FR 69693, Nov. 20, 2000; 73 FR 
77511, Dec. 19, 2008; 81 FR 43450, July 1, 2016; 82 FR 2225, 2226, Jan. 
9, 2017]



Sec. 5.6  Enforcement.

    (a)(1) It shall be the responsibility of the Federal agency to 
ascertain whether the clauses required by Sec. 5.5 have been inserted in 
the contracts subject to the labor standards provisions of the Acts 
contained in Sec. 5.1. Agencies which do not directly enter into such 
contracts shall promulgate the necessary regulations or procedures to 
require the recipient of the Federal assistance to insert in its 
contracts the provisions of Sec. 5.5. No payment, advance, grant, loan, 
or guarantee of funds shall be approved by the Federal agency unless the 
agency insures that the clauses required by Sec. 5.5 and the appropriate 
wage determination of the Secretary of Labor are contained in such 
contracts. Furthermore, no payment, advance, grant, loan, or guarantee 
of funds shall be approved by the Federal agency after the beginning of 
construction unless there is on file with the agency a certification by 
the contractor that the contractor and its subcontractors have complied 
with the provisions of Sec. 5.5 or unless there is on file with the 
agency a certification by the contractor that there is a substantial 
dispute with respect to the required provisions.

[[Page 125]]

    (2) Payrolls and Statements of Compliance submitted pursuant to 
Sec. 5.5(a)(3)(ii) shall be preserved by the Federal agency for a period 
of 3 years from the date of completion of the contract and shall be 
produced at the request of the Department of Labor at any time during 
the 3-year period.
    (3) The Federal agency shall cause such investigations to be made as 
may be necessary to assure compliance with the labor standards clauses 
required by Sec. 5.5 and the applicable statutes listed in Sec. 5.1. 
Investigations shall be made of all contracts with such frequency as may 
be necessary to assure compliance. Such investigations shall include 
interviews with employees, which shall be taken in confidence, and 
examinations of payroll data and evidence of registration and 
certification with respect to apprenticeship and training plans. In 
making such examinations, particular care shall be taken to determine 
the correctness of classifications and to determine whether there is a 
disproportionate employment of laborers and of apprentices or trainees 
registered in approved programs. Such investigations shall also include 
evidence of fringe benefit plans and payments thereunder. Complaints of 
alleged violations shall be given priority.
    (4) In accordance with normal operating procedures, the contracting 
agency may be furnished various investigatory material from the 
investigation files of the Department of Labor. None of the material, 
other than computations of back wages and liquidated damages and the 
summary of back wages due, may be disclosed in any manner to anyone 
other than Federal officials charged with administering the contract or 
program providing Federal assistance to the contract, without requesting 
the permission and views of the Department of Labor.
    (5) It is the policy of the Department of Labor to protect the 
identity of its confidential sources and to prevent an unwarranted 
invasion of personal privacy. Accordingly, the identity of an employee 
who makes a written or oral statement as a complaint or in the course of 
an investigation, as well as portions of the statement which would 
reveal the employee's identity, shall not be disclosed in any manner to 
anyone other than Federal officials without the prior consent of the 
employee. Disclosure of employee statements shall be governed by the 
provisions of the ``Freedom of Information Act'' (5 U.S.C. 552, see 29 
CFR part 70) and the ``Privacy Act of 1974'' (5 U.S.C. 552a).
    (b) The Administrator shall cause to be made such investigations as 
deemed necessary, in order to obtain compliance with the labor standards 
provisions of the applicable statutes listed in Sec. 5.1, or to affirm 
or reject the recommendations by the Agency Head with respect to labor 
standards matters arising under the statutes listed in Sec. 5.1. Federal 
agencies, contractors, subcontractors, sponsors, applicants, or owners 
shall cooperate with any authorized representative of the Department of 
Labor in the inspection of records, in interviews with workers, and in 
all other aspects of the investigations. The findings of such an 
investigation, including amounts found due, may not be altered or 
reduced without the approval of the Department of Labor. Where the 
underpayments disclosed by such an investigation total $1,000 or more, 
where there is reason to believe that the violations are aggravated or 
willful (or, in the case of the Davis-Bacon Act, that the contractor has 
disregarded its obligations to employees and subcontractors), or where 
liquidated damages may be assessed under the Contract Work Hours and 
Safety Standards Act, the Department of Labor will furnish the Federal 
agency an enforcement report detailing the labor standards violations 
disclosed by the investigation and any action taken by the contractor to 
correct the violative practices, including any payment of back wages. In 
other circumstances, the Federal agency will be furnished a letter of 
notification summarizing the findings of the investigation.



Sec. 5.7  Reports to the Secretary of Labor.

    (a) Enforcement reports. (1) Where underpayments by a contractor or 
subcontractor total less than $1,000, and where there is no reason to 
believe that the violations are aggravated or willful (or, in the case 
of the Davis-Bacon Act that the contractor has disregarded its

[[Page 126]]

obligations to employees and subcontractors), and where restitution has 
been effected and future compliance assured, the Federal agency need not 
submit its investigative findings and recommendations to the 
Administrator, unless the investigation was made at the request of the 
Department of Labor. In the latter case, the Federal agency shall submit 
a factual summary report detailing any violations including any data on 
the amount of restitution paid, the number of workers who received 
restitution, liquidated damages assessed under the Contract Work Hours 
and Safety Standards Act, corrective measures taken (such as ``letters 
of notice''), and any information that may be necessary to review any 
recommendations for an appropriate adjustment in liquidated damages 
under Sec. 5.8.
    (2) Where underpayments by a contractor or subcontractor total 
$1,000 or more, or where there is reason to believe that the violations 
are aggravated or willful (or, in the case of the Davis-Bacon Act, that 
the contractor has disregarded its obligations to employees and 
subcontractors), the Federal agency shall furnish within 60 days after 
completion of its investigation, a detailed enforcement report to the 
Administrator.
    (b) Semi-annual enforcement reports. To assist the Secretary in 
fulfilling the responsibilities under Reorganization Plan No. 14 of 
1950, Federal agencies shall furnish to the Administrator by April 30 
and October 31 of each calendar year semi-annual reports on compliance 
with and enforcement of the labor standards provisions of the Davis-
Bacon Act and its related acts covering the periods of October 1 through 
March 31 and April 1 through September 30, respectively. Such reports 
shall be prepared in the manner prescribed in memoranda issued to 
Federal agencies by the Administrator. This report has been cleared in 
accordance with FPMR 101-11.11 and assigned interagency report control 
number 1482-DOL-SA.
    (c) Additional information. Upon request, the Agency Head shall 
transmit to the Administrator such information available to the Agency 
with respect to contractors and subcontractors, their contracts, and the 
nature of the contract work as the Administrator may find necessary for 
the performance of his or her duties with respect to the labor standards 
provisions referred to in this part.
    (d) Contract termination. Where a contract is terminated by reason 
of violations of the labor standards provisions of the statutes listed 
in Sec. 5.1, a report shall be submitted promptly to the Administrator 
and to the Comptroller General (if the contract is subject to the Davis-
Bacon Act), giving the name and address of the contractor or 
subcontractor whose right to proceed has been terminated, and the name 
and address of the contractor or subcontractor, if any, who is to 
complete the work, the amount and number of the contract, and the 
description of the work to be performed.



Sec. 5.8  Liquidated damages under the Contract Work Hours and
Safety Standards Act.

    (a) The Contract Work Hours and Safety Standards Act requires that 
laborers or mechanics shall be paid wages at a rate not less than one 
and one-half times the basic rate of pay for all hours worked in excess 
of forty hours in any workweek. In the event of violation of this 
provision, the contractor and any subcontractor shall be liable for the 
unpaid wages and in addition for liquidated damages, computed with 
respect to each laborer or mechanic employed in violation of the Act in 
the amount of $25 for each calendar day in the workweek on which such 
individual was required or permitted to work in excess of forty hours 
without payment of required overtime wages. Any contractor of 
subcontractor aggrieved by the withholding of liquidated damages shall 
have the right to appeal to the head of the agency of the United States 
(or the territory of District of Columbia, as appropriate) for which the 
contract work was performed or for which financial assistance was 
provided.
    (b) Findings and recommendations of the Agency Head. The Agency Head 
has the authority to review the administrative determination of 
liquidated damages and to issue a final order affirming the 
determination. It is not

[[Page 127]]

necessary to seek the concurrence of the Administrator but the 
Administrator shall be advised of the action taken. Whenever the Agency 
Head finds that a sum of liquidated damages administratively determined 
to be due is incorrect or that the contractor or subcontractor violated 
inadvertently the provisions of the Act notwithstanding the exercise of 
due care upon the part of the contractor or subcontractor involved, and 
the amount of the liquidated damages computed for the contract is in 
excess of $500, the Agency Head may make recommendations to the 
Secretary that an appropriate adjustment in liquidated damages be made 
or that the contractor or subcontractor be relieved of liability for 
such liquidated damages. Such findings with respect to liquidated 
damages shall include findings with respect to any wage underpayments 
for which the liquidated damages are determined.
    (c) The recommendations of the Agency Head for adjustment or relief 
from liquidated damages under paragraph (a) of this section shall be 
reviewed by the Administrator or an authorized representative who shall 
issue an order concurring in the recommendations, partially concurring 
in the recommendations, or rejecting the recommendations, and the 
reasons therefor. The order shall be the final decision of the 
Department of Labor, unless a petition for review is filed pursuant to 
part 7 of this title, and the Administrative Review Board in its 
discretion reviews such decision and order; or, with respect to 
contracts subject to the Service Contract Act, unless petition for 
review is filed pursuant to part 8 of this title, and the Administrative 
Review Board in its discretion reviews such decision and order.
    (d) Whenever the Agency Head finds that a sum of liquidated damages 
administratively determined to be due under section 104(a) of the 
Contract Work Hours and Safety Standards Act for a contract is $500 or 
less and the Agency Head finds that the sum of liquidated damages is 
incorrect or that the contractor or subcontractor violated inadvertently 
the provisions of the Contract Work Hours and Safety Standards Act 
notwithstanding the exercise of due care upon the part of the contractor 
or subcontractor involved, an appropriate adjustment may be made in such 
liquidated damages or the contractor or subcontractor may be relieved of 
liability for such liquidated damages without submitting recommendations 
to this effect or a report to the Department of Labor. This delegation 
of authority is made under section 105 of the Contract Work Hours and 
Safety Standards Act and has been found to be necessary and proper in 
the public interest to prevent undue hardship and to avoid serious 
impairment of the conduct of Government business.

[48 FR 19541, Apr. 29, 1983, as amended at 51 FR 12265, Apr. 9, 1986; 51 
FR 13496, Apr. 21, 1986; 81 FR 43450, July 1, 2016]



Sec. 5.9  Suspension of funds.

    In the event of failure or refusal of the contractor or any 
subcontractor to comply with the labor standards clauses contained in 
Sec. 5.5 and the applicable statutes listed in Sec. 5.1, the Federal 
agency, upon its own action or upon written request of an authorized 
representative of the Department of Labor, shall take such action as may 
be necessary to cause the suspension of the payment, advance or 
guarantee of funds until such time as the violations are discontinued or 
until sufficient funds are withheld to compensate employees for the 
wages to which they are entitled and to cover any liquidated damages 
which may be due.



Sec. 5.10  Restitution, criminal action.

    (a) In cases other than those forwarded to the Attorney General of 
the United States under paragraph (b), of this section, where violations 
of the labor standards clauses contained in Sec. 5.5 and the applicable 
statutes listed in Sec. 5.1 result in underpayment of wages to 
employees, the Federal agency or an authorized representative of the 
Department of Labor shall request that restitution be made to such 
employees or on their behalf to plans, funds, or programs for any type 
of bona fide fringe benefits within the meaning of section 1(b)(2) of 
the Davis-Bacon Act.
    (b) In cases where the Agency Head or the Administrator finds 
substantial

[[Page 128]]

evidence that such violations are willful and in violation of a criminal 
statute, the matter shall be forwarded to the Attorney General of the 
United States for prosecution if the facts warrant. In all such cases 
the Administrator shall be informed simultaneously of the action taken.



Sec. 5.11  Disputes concerning payment of wages.

    (a) This section sets forth the procedure for resolution of disputes 
of fact or law concerning payment of prevailing wage rates, overtime 
pay, or proper classification. The procedures in this section may be 
initiated upon the Administrator's own motion, upon referral of the 
dispute by a Federal agency pursuant to Sec. 5.5(a)(9), or upon request 
of the contractor or subcontractor(s).
    (b)(1) In the event of a dispute described in paragraph (a) of this 
section in which it appears that relevant facts are at issue, the 
Administrator will notify the affected contractor and subcontractor(s) 
(if any), by registered or certified mail to the last known address, of 
the investigation findings. If the Administrator determines that there 
is reasonable cause to believe that the contractor and/or 
subcontractor(s) should also be subject to debarment under the Davis-
Bacon Act or Sec. 5.12(a)(1), the letter will so indicate.
    (2) A contractor and/or subcontractor desiring a hearing concerning 
the Administrator's investigative findings shall request such a hearing 
by letter postmarked within 30 days of the date of the Administrator's 
letter. The request shall set forth those findings which are in dispute 
and the reasons therefor, including any affirmative defenses, with 
respect to the violations and/or debarment, as appropriate.
    (3) Upon receipt of a timely request for a hearing, the 
Administrator shall refer the case to the Chief Administrative Law Judge 
by Order of Reference, to which shall be attached a copy of the letter 
from the Administrator and response thereto, for designation of an 
Administrative Law Judge to conduct such hearings as may be necessary to 
resolve the disputed matters. The hearing shall be conducted in 
accordance with the procedures set forth in 29 CFR part 6.
    (c)(1) In the event of a dispute described in paragraph (a) of this 
section in which it appears that there are no relevant facts at issue, 
and where there is not at that time reasonable cause to institute 
debarment proceedings under Sec. 5.12, the Administrator shall notify 
the contractor and subcontractor(s) (if any), by registered or certified 
mail to the last known address, of the investigation findings, and shall 
issue a ruling on any issues of law known to be in dispute.
    (2)(i) If the contractor and/or subcontractor(s) disagree with the 
factual findings of the Administrator or believe that there are relevant 
facts in dispute, the contractor or subcontractor(s) shall so advise the 
Administrator by letter postmarked within 30 days of the date of the 
Administrator's letter. In the response, the contractor and/or 
subcontractor(s) shall explain in detail the facts alleged to be in 
dispute and attach any supporting documentation.
    (ii) Upon receipt of a response under paragraph (c)(2)(i) of this 
section alleging the existence of a factual dispute, the Administrator 
shall examine the information submitted. If the Administrator determines 
that there is a relevant issue of fact, the Administrator shall refer 
the case to the Chief Administrative Law Judge in accordance with 
paragraph (b)(3) of this section. If the Administrator determines that 
there is no relevant issue of fact, the Administrator shall so rule and 
advise the contractor and subcontractor(s) (if any) accordingly.
    (3) If the contractor and/or subcontractor(s) desire review of the 
ruling issued by the Administrator under paragraph (c)(1) or (2) of this 
section, the contractor and/or subcontractor(s) shall file a petition 
for review thereof with the Administrative Review Board within 30 days 
of the date of the ruling, with a copy thereof the Administrator. The 
petition for review shall be filed in accordance with part 7 of this 
title.
    (d) If a timely response to the Administrator's findings or ruling 
is not made or a timely petition for review is not filed, the 
Administrator's findings and/or ruling shall be final, except that

[[Page 129]]

with respect to debarment under the Davis-Bacon Act, the Administrator 
shall advise the Comptroller General of the Administrator's 
recommendation in accordance with Sec. 5.12(a)(1). If a timely response 
or petition for review is filed, the findings and/or ruling of the 
Administrator shall be inoperative unless and until the decision is 
upheld by the Administrative Law Judge or the Administrative Review 
Board.



Sec. 5.12  Debarment proceedings.

    (a)(1) Whenever any contractor or subcontractor is found by the 
Secretary of Labor to be in aggravated or willful violation of the labor 
standards provisions of any of the applicable statutes listed in 
Sec. 5.1 other than the Davis-Bacon Act, such contractor or 
subcontractor or any firm, corporation, partnership, or association in 
which such contractor or subcontractor has a substantial interest shall 
be ineligible for a period not to exceed 3 years (from the date of 
publication by the Comptroller General of the name or names of said 
contractor or subcontractor on the ineligible list as provided below) to 
receive any contracts or subcontracts subject to any of the statutes 
listed in Sec. 5.1.
    (2) In cases arising under contracts covered by the Davis-Bacon Act, 
the Administrator shall transmit to the Comptroller General the names of 
the contractors or subcontractors and their responsible officers, if any 
(and any firms in which the contractors or subcontractors are known to 
have an interest), who have been found to have disregarded their 
obligations to employees, and the recommendation of the Secretary of 
Labor or authorized representative regarding debarment. The Comptroller 
General will distribute a list to all Federal agencies giving the names 
of such ineligible person or firms, who shall be ineligible to be 
awarded any contract or subcontract of the United States or the District 
of Columbia and any contract or subcontract subject to the labor 
standards provisions of the statutes listed in Sec. 5.1.
    (b)(1) In addition to cases under which debarment action is 
initiated pursuant to Sec. 5.11, whenever as a result of an 
investigation conducted by the Federal agency or the Department of 
Labor, and where the Administrator finds reasonable cause to believe 
that a contractor or subcontractor has committed willful or aggravated 
violations of the labor standards provisions of any of the statutes 
listed in Sec. 5.1 (other than the Davis-Bacon Act), or has committed 
violations of the Davis-Bacon Act which constitute a disregard of its 
obligations to employees or subcontractors under section 3(a) thereof, 
the Administrator shall notify by registered or certified mail to the 
last known address, the contractor or subcontractor and its responsible 
officers, if any (and any firms in which the contractor or subcontractor 
are known to have a substantial interest), of the finding. The 
Administrator shall afford such contractor or subcontractor and any 
other parties notified an opportunity for a hearing as to whether 
debarment action should be taken under paragraph (a)(1) of this section 
or section 3(a) of the Davis-Bacon Act. The Administrator shall furnish 
to those notified a summary of the investigative findings. If the 
contractor or subcontractor or any other parties notified wish to 
request a hearing as to whether debarment action should be taken, such a 
request shall be made by letter postmarked within 30 days of the date of 
the letter from the Administrator, and shall set forth any findings 
which are in dispute and the reasons therefor, including any affirmative 
defenses to be raised. Upon receipt of such request for a hearing, the 
Administrator shall refer the case to the Chief Administrative Law Judge 
by Order of Reference, to which shall be attached a copy of the letter 
from the Administrator and the response thereto, for designation of an 
Administrative Law Judge to conduct such hearings as may be necessary to 
determine the matters in dispute. In considering debarment under any of 
the statutes listed in Sec. 5.1 other than the Davis-Bacon Act, the 
Administrative Law Judge shall issue an order concerning whether the 
contractor or subcontractor is to be debarred in accordance with 
paragraph (a)(1) of this section. In considering debarment under the 
Davis-Bacon Act, the Administrative

[[Page 130]]

Law Judge shall issue a recommendation as to whether the contractor or 
subcontractor should be debarred under section 3(a) of the Act.
    (2) Hearings under this section shall be conducted in accordance 
with 29 CFR part 6. If no hearing is requested within 30 days of receipt 
of the letter from the Administrator, the Administrator's findings shall 
be final, except with respect to recommendations regarding debarment 
under the Davis-Bacon Act, as set forth in paragraph (a)(2) of this 
section.
    (c) Any person or firm debarred under paragraph (a)(1) of this 
section may in writing request removal from the debarment list after six 
months from the date of publication by the Comptroller General of such 
person or firm's name on the ineligible list. Such a request should be 
directed to the Administrator of the Wage and Hour Division, U.S. 
Department of Labor, Washington, DC 20210, and shall contain a full 
explanation of the reasons why such person or firm should be removed 
from the ineligible list. In cases where the contractor or subcontractor 
failed to make full restitution to all underpaid employees, a request 
for removal will not be considered until such underpayments are made. In 
all other cases, the Administrator will examine the facts and 
circumstances surrounding the violative practices which caused the 
debarment, and issue a decision as to whether or not such person or firm 
has demonstrated a current responsibility to comply with the labor 
standards provisions of the statutes listed in Sec. 5.1, and therefore 
should be removed from the ineligible list. Among the factors to be 
considered in reaching such a decision are the severity of the 
violations, the contractor or subcontractor's attitude towards 
compliance, and the past compliance history of the firm. In no case will 
such removal be effected unless the Administrator determines after an 
investigation that such person or firm is in compliance with the labor 
standards provisions applicable to Federal contracts and Federally 
assisted construction work subject to any of the applicable statutes 
listed in Sec. 5.1 and other labor statutes providing wage protection, 
such as the Service Contract Act, the Walsh-Healey Public Contracts Act, 
and the Fair Labor Standards Act. If the request for removal is denied, 
the person or firm may petition for review by the Administrative Review 
Board pursuant to 29 CFR part 7.
    (d)(1) Section 3(a) of the Davis-Bacon Act provides that for a 
period of three years from date of publication on the ineligible list, 
no contract shall be awarded to any persons or firms placed on the list 
as a result of a finding by the Comptroller General that such persons or 
firms have disregarded obligations to employees and subcontractors under 
that Act, and further, that no contract shall be awarded to ``any firm, 
corporation, partnership, or association in which such persons or firms 
have an interest.'' Paragraph (a)(1) of this section similarly provides 
that for a period not to exceed three years from date of publication on 
the ineligible list, no contract subject to any of the statutes listed 
in Sec. 5.1 shall be awarded to any contractor or subcontractor on the 
ineligible list pursuant to that paragraph, or to ``any firm, 
corporation, partnership, or association'' in which such contractor or 
subcontractor has a ``substantial interest.'' A finding as to whether 
persons or firms whose names appear on the ineligible list have an 
interest (or a substantial interest, as appropriate) in any other firm, 
corporation, partnership, or association, may be made through 
investigation, hearing, or otherwise.
    (2)(i) The Administrator, on his/her own motion or after receipt of 
a request for a determination pursuant to paragraph (d)(3) of this 
section may make a finding on the issue of interest (or substantial 
interest, as appropriate).
    (ii) If the Administrator determines that there may be an interest 
(or substantial interest, as appropriate), but finds that there is 
insufficient evidence to render a final ruling thereon, the 
Administrator may refer the issue to the Chief Administrative Law Judge 
in accordance with paragraph (d)(4) of this section.
    (iii) If the Administrator finds that no interest (or substantial 
interest, as appropriate) exists, or that there is not sufficient 
information to warrant the

[[Page 131]]

initiation of an investigation, the requesting party, if any, will be so 
notified and no further action taken.
    (iv)(A) If the Administrator finds that an interest (or substantial 
interest, as appropriate) exists, the person or firm affected will be 
notified of the Administrator's finding (by certified mail to the last 
known address), which shall include the reasons therefor, and such 
person or firm shall be afforded an opportunity to request that a 
hearing be held to render a decision on the issue.
    (B) Such person or firm shall have 20 days from the date of the 
Administrator's ruling to request a hearing. A detailed statement of the 
reasons why the Administrator's ruling is in error, including facts 
alleged to be in dispute, if any, shall be submitted with the request 
for a hearing.
    (C) If no hearing is requested within the time mentioned in 
paragraph (d)(2)(iv)(B) of this section, the Administrator's finding 
shall be final and the Administrator shall so notify the Comptroller 
General. If a hearing is requested, the ruling of the Administrator 
shall be inoperative unless and until the administrative law judge or 
the Administrative Review Board issues an order that there is an 
interest (or substantial interest, as appropriate).
    (3)(i) A request for a determination of interest (or substantial 
interest, as appropriate), may be made by any interested party, 
including contractors or prospective contractors and associations of 
contractor's representatives of employees, and interested Government 
agencies. Such a request shall be submitted in writing to the 
Administrator, Wage and Hour Division, U.S. Department of Labor, 
Washington, DC 20210.
    (ii) The request shall include a statement setting forth in detail 
why the petitioner believes that a person or firm whose name appears on 
the debarred bidders list has an interest (or a substantial interest, as 
appropriate) in any firm, corporation, partnership, or association which 
is seeking or has been awarded a contract of the United States or the 
District of Columbia, or which is subject to any of the statutes listed 
in Sec. 5.1. No particular form is prescribed for the submission of a 
request under this section.
    (4) Referral to the Chief Administrative Law Judge. The 
Administrator, on his/her own motion under paragraph (d)(2)(ii) of this 
section or upon a request for hearing where the Administrator determines 
that relevant facts are in dispute, will by order refer the issue to the 
Chief Administrative Law Judge, for designation of an Administrative Law 
Judge who shall conduct such hearings as may be necessary to render a 
decision solely on the issue of interest (or substantial interest, as 
appropriate). Such proceedings shall be conducted in accordance with the 
procedures set forth at 29 CFR part 6.
    (5) Referral to the Administrative Review Board. If the person or 
firm affected requests a hearing and the Administrator determines that 
relevant facts are not in dispute, the Administrator will refer the 
issue and the record compiled thereon to the Administrative Review Board 
to render a decision solely on the issue of interest (or substantial 
interest, as appropriate). Such proceeding shall be conducted in 
accordance with the procedures set forth at 29 CFR part 7.

[48 FR 19541, Apr. 29, 1983, as amended at 48 FR 50313, Nov. 1, 1983; 82 
FR 2226, Jan. 9, 2017]



Sec. 5.13  Rulings and interpretations.

    All questions relating to the application and interpretation of wage 
determinations (including the classifications therein) issued pursuant 
to part 1 of this subtitle, of the rules contained in this part and in 
parts 1 and 3, and of the labor standards provisions of any of the 
statutes listed in Sec. 5.1 shall be referred to the Administrator for 
appropriate ruling or interpretation. The rulings and interpretations 
shall be authoritative and those under the Davis-Bacon Act may be relied 
upon as provided for in section 10 of the Portal-to-Portal Act of 1947 
(29 U.S.C. 259). Requests for such rulings and interpretations should be 
addressed to the Administrator, Wage and Hour Division, U.S. Department 
of Labor, Washington, DC 20210.

[82 FR 2226, Jan. 9, 2017]

[[Page 132]]



Sec. 5.14  Variations, tolerances, and exemptions from parts 1 and 3
of this subtitle and this part.

    The Secretary of Labor may make variations, tolerances, and 
exemptions from the regulatory requirements of this part and those of 
parts 1 and 3 of this subtitle whenever the Secretary finds that such 
action is necessary and proper in the public interest or to prevent 
injustice and undue hardship. Variations, tolerances, and exemptions may 
not be made from the statutory requirements of any of the statutes 
listed in Sec. 5.1 unless the statute specifically provides such 
authority.



Sec. 5.15  Limitations, variations, tolerances, and exemptions under
the Contract Work Hours and Safety Standards Act.

    (a) General. Upon his or her own initiative or upon the request of 
any Federal agency, the Secretary of Labor may provide under section 105 
of the Contract Work Hours and Safety Standards Act reasonable 
limitations and allow variations, tolerances, and exemptions to and from 
any or all provisions of that Act whenever the Secretary finds such 
action to be necessary and proper in the public interest to prevent 
injustice, or undue hardship, or to avoid serious impairment of the 
conduct of Government business. Any request for such action by the 
Secretary shall be submitted in writing, and shall set forth the reasons 
for which the request is made.
    (b) Exemptions. Pursuant to section 105 of the Contract Work Hours 
and Safety Standards Act, the following classes of contracts are found 
exempt from all provisions of that Act in order to prevent injustice, 
undue hardship, or serious impairment of Government business:
    (1) Contract work performed in a workplace within a foreign country 
or within territory under the jurisdiction of the United States other 
than the following: A State of the United States; the District of 
Columbia; Puerto Rico; the Virgin Islands; Outer Continental Shelf lands 
defined in the Outer Continental Shelf Lands Act (ch. 345, 67 Stat. 
462); American Samoa; Guam; Wake Island; Eniwetok Atoll; Kwajalein 
Atoll; and Johnston Island.
    (2) Agreements entered into by or on behalf of the Commodity Credit 
Corporation providing for the storing in or handling by commercial 
warehouses of wheat, corn, oats, barley, rye, grain sorghums, soybeans, 
flaxseed, rice, naval stores, tobacco, peanuts, dry beans, seeds, 
cotton, and wool.
    (3) Sales of surplus power by the Tennessee Valley Authority to 
States, counties, municipalities, cooperative organization of citizens 
or farmers, corporations and other individuals pursuant to section 10 of 
the Tennessee Valley Authority Act of 1933 (16 U.S.C. 8311).
    (c) Tolerances. (1) The ``basic rate of pay'' under section 102 of 
the Contract Work Hours and Safety Standards Act may be computed as an 
hourly equivalent to the rate on which time-and-one-half overtime 
compensation may be computed and paid under section 7 of the Fair Labor 
Standards Act of 1938, as amended (29 U.S.C. 207), as interpreted in 
part 778 of this title. This tolerance is found to be necessary and 
proper in the public interest in order to prevent undue hardship.
    (2) Concerning the tolerance provided in paragraph (c)(1) of this 
section, the provisions of section 7(d)(2) of the Fair Labor Standards 
Act and Sec. 778.7 of this title should be noted. Under these 
provisions, payments for occasional periods when no work is performed, 
due to vacations, and similar causes are excludable from the ``regular 
rate'' under the Fair Labor Standards Act. Such payments, therefore, are 
also excludable from the ``basic rate'' under the Contract Work Hours 
and Safety Standards Act.
    (3) See Sec. 5.8(c) providing a tolerance subdelegating authority to 
the heads of agencies to make appropriate adjustments in the assessment 
of liquidated damages totaling $500 or less under specified 
circumstances.
    (4)(i) Time spent in an organized program of related, supplemental 
instruction by laborers or mechanics employed under bona fide 
apprenticeship or training programs may be excluded from working time if 
the criteria prescribed in paragraphs (c)(4)(ii) and (iii) of this 
section are met.

[[Page 133]]

    (ii) The apprentice or trainee comes within the definition contained 
in Sec. 5.2(n).
    (iii) The time in question does not involve productive work or 
performance of the apprentice's or trainee's regular duties.
    (d) Variations. (1) In the event of failure or refusal of the 
contractor or any subcontractor to comply with overtime pay requirements 
of the Contract Work Hours and Safety Standards Act, if the funds 
withheld by Federal agencies for the violations are not sufficient to 
pay fully both the unpaid wages due laborers and mechanics and the 
liquidated damages due the United States, the available funds shall be 
used first to compensate the laborers and mechanics for the wages to 
which they are entitled (or an equitable portion thereof when the funds 
are not adequate for this purpose); and the balance, if any, shall be 
used for the payment of liquidated damages.
    (2) In the performance of any contract entered into pursuant to the 
provisions of 38 U.S.C. 620 to provide nursing home care of veterans, no 
contractor or subcontractor under such contract shall be deemed in 
violation of section 102 of the Contract Work Hours and Safety Standards 
Act by virtue of failure to pay the overtime wages required by such 
section for work in excess of 40 hours in the workweek to any individual 
employed by an establishment which is an institution primarily engaged 
in the care of the sick, the aged, or the mentally ill or defective who 
reside on the premises if, pursuant to an agreement or understanding 
arrived at between the employer and the employee before performance of 
the work, a work period of 14 consecutive days is accepted in lieu of 
the workweek of 7 consecutive days for the purpose of overtime 
compensation and if such individual receives compensation for employment 
in excess of 8 hours in any workday and in excess of 80 hours in such 
14-day period at a rate not less than 1\1/2\ times the regular rate at 
which the individual is employed, computed in accordance with the 
requirements of the Fair Labor Standards Act of 1938, as amended.
    (3) Any contractor or subcontractor performing on a government 
contract the principal purpose of which is the furnishing of fire 
fighting or suppression and related services, shall not be deemed to be 
in violation of section 102 of the Contract Work Hour and Safety 
Standards Act for failing to pay the overtime compensation required by 
section 102 of the Act in accordance with the basic rate of pay as 
defined in paragraph (c)(1) of this section, to any pilot or copilot of 
a fixed-wing or rotary-wing aircraft employed on such contract if:
    (i) Pursuant to a written employment agreement between the 
contractor and the employee which is arrived at before performance of 
the work.
    (A) The employee receives gross wages of not less than $300 per week 
regardless of the total number of hours worked in any workweek, and
    (B) Within any workweek the total wages which an employee receives 
are not less than the wages to which the employee would have been 
entitled in that workweek if the employee were paid the minimum hourly 
wage required under the contract pursuant to the provisions of the 
Service Contract Act of 1965 and any applicable wage determination 
issued thereunder for all hours worked, plus an additional premium 
payment of one-half times such minimum hourly wage for all hours worked 
in excess of 40 hours in the workweek;
    (ii) The contractor maintains accurate records of the total daily 
and weekly hours of work performed by such employee on the government 
contract. In the event these conditions for the exemption are not met, 
the requirements of section 102 of the Contract Work Hours and Safety 
Standards Act shall be applicable to the contract from the date the 
contractor or

[[Page 134]]

subcontractor fails to satisfy the conditions until completion of the 
contract.

(Reporting and recordkeeping requirements in paragraph (d)(2) have been 
approved by the Office of Management and Budget under control numbers 
1235-0023 and 1235-0018. Reporting and recordkeeping requirements in 
paragraph (d)(3)(ii) have been approved by the Office of Management and 
Budget under control number 1235-0018)

[48 FR 19541, Apr. 29, 1983, as amended at 51 FR 12265, Apr. 9, 1986; 61 
FR 40716, Aug. 5, 1996; 82 FR 2226, Jan. 9, 2017]



Sec. 5.16  Training plans approved or recognized by the Department
of Labor prior to August 20, 1975.

    (a) Notwithstanding the provisions of Sec. 5.5(a)(4)(ii) relating to 
the utilization of trainees on Federal and federally assisted 
construction, no contractor shall be required to obtain approval of a 
training program which, prior to August 20, 1975, was approved by the 
Department of Labor for purposes of the Davis-Bacon and Related Acts, 
was established by agreement of organized labor and management and 
therefore recognized by the Department, and/or was recognized by the 
Department under Executive Order 11246, as amended. A copy of the 
program and evidence of its prior approval, if applicable shall be 
submitted to the Employment and Training Administration, which shall 
certify such prior approval or recognition of the program. In every 
other respect, the provisions of Sec. 5.5(a)(4)(ii)--including those 
relating to registration of trainees, permissible ratios, and wage rates 
to be paid--shall apply to these programs.
    (b) Every trainee employed on a contract executed on and after 
August 20, 1975, in one of the above training programs must be 
individually registered in the program in accordance with Employment and 
Training Administration procedures, and must be paid at the rate 
specified in the program for the level of progress. Any such employee 
listed on the payroll at a trainee rate who is not registered and 
participating in a program certified by ETA pursuant to this section, or 
approved and certified by ETA pursuant to Sec. 5.5(a)(4)(ii), must be 
paid the wage rate determined by the Secretary of Labor for the 
classification of work actually performed. The ratio of trainees to 
journeymen shall not be greater than permitted by the terms of the 
program.
    (c) In the event a program which was recognized or approved prior to 
August 20, 1975, is modified, revised, extended, or renewed, the changes 
in the program or its renewal must be approved by the Employment and 
Training Administration before they may be placed into effect.



Sec. 5.17  Withdrawal of approval of a training program.

    If at any time the Employment and Training Administration 
determines, after opportunity for a hearing, that the standards of any 
program, whether it is one recognized or approved prior to August 20, 
1975, or a program subsequently approved, have not been complied with, 
or that such a program fails to provide adequate training for 
participants, a contractor will no longer be permitted to utilize 
trainees at less than the predetermined rate for the classification of 
work actually performed until an acceptable program is approved.



Subpart B_Interpretation of the Fringe Benefits Provisions of the Davis-
                                Bacon Act

    Source: 29 FR 13465, Sept. 30, 1964, unless otherwise noted.



Sec. 5.20  Scope and significance of this subpart.

    The 1964 amendments (Pub. L. 88-349) to the Davis-Bacon Act require, 
among other things, that the prevailing wage determined for Federal and 
federally-assisted construction include: (a) The basic hourly rate of 
pay; and (b) the amount contributed by the contractor or subcontractor 
for certain fringe benefits (or the cost to them of such benefits). The 
purpose of this subpart is to explain the provisions of these 
amendments. This subpart makes available in one place official 
interpretations of the fringe benefits provisions of the Davis-Bacon 
Act. These interpretations will guide the Department of Labor in 
carrying out its responsibilities under these provisions. These 
interpretations are intended also for the guidance of

[[Page 135]]

contractors, their associations, laborers and mechanics and their 
organizations, and local, State and Federal agencies, who may be 
concerned with these provisions of the law. The interpretations 
contained in this subpart are authoritative and may be relied upon as 
provided for in section 10 of the Portal-to-Portal Act of 1947 (29 
U.S.C. 359). The omission to discuss a particular problem in this 
subpart or in interpretations supplementing it should not be taken to 
indicate the adoption of any position by the Secretary of Labor with 
respect to such problem or to constitute an administrative 
interpretation, practice, or enforcement policy. Questions on matters 
not fully covered by this subpart may be referred to the Secretary for 
interpretation as provided in Sec. 5.12.



Sec. 5.21  [Reserved]



Sec. 5.22  Effect of the Davis-Bacon fringe benefits provisions.

    The Davis-Bacon Act and the prevailing wage provisions of the 
related statutes listed in Sec. 1.1 of this subtitle confer upon the 
Secretary of Labor the authority to predetermine, as minimum wages, 
those wage rates found to be prevailing for corresponding classes of 
laborers and mechanics employed on projects of a character similar to 
the contract work in the area in which the work is to be performed. See 
paragraphs (a) and (b) of Sec. 1.2 of this subtitle. The fringe benefits 
amendments enlarge the scope of this authority by including certain bona 
fide fringe benefits within the meaning of the terms ``wages'', ``scale 
of wages'', ``wage rates'', ``minimum wages'' and ``prevailing wages'', 
as used in the Davis-Bacon Act.



Sec. 5.23  The statutory provisions.

    The fringe benefits provisions of the 1964 amendments to the Davis-
Bacon Act are, in part, as follows:

    (b) As used in this Act the term ``wages'', ``scale of wages'', 
``wage rates'', ``minimum wages'', and ``prevailing wages'' shall 
include--
    (1) The basic hourly rate of pay; and
    (2) The amount of--
    (A) The rate of contribution irrevocably made by a contractor or 
subcontractor to a trustee or to a third person pursuant to a fund, 
plan, or program; and
    (B) The rate of costs to the contractor or subcontractor which may 
be reasonably anticipated in providing benefits to laborers and 
mechanics pursuant to an enforceable commitment to carry out a 
financially responsible plan or program which was communicated in 
writing to the laborers and mechanics affected,

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 foregoing, for unemployment 
benefits, life insurance, disability and sickness insurance, or accident 
insurance, for vacation and holiday pay, for defraying 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 such benefits * 
* *.



Sec. 5.24  The basic hourly rate of pay.

    ``The basic hourly rate of pay'' is that part of a laborer's or 
mechanic's wages which the Secretary of Labor would have found and 
included in wage determinations prior to the 1964 amendments. The 
Secretary of Labor is required to continue to make a separate finding of 
this portion of the wage. In general, this portion of the wage is the 
cash payment made directly to the laborer or mechanic. It does not 
include fringe benefits.



Sec. 5.25  Rate of contribution or cost for fringe benefits.

    (a) Under the amendments, the Secretary is obligated to make a 
separate finding of the rate of contribution or cost of fringe benefits. 
Only the amount of contributions or costs for fringe benefits which meet 
the requirements of the act will be considered by the Secretary. These 
requirements are discussed in this subpart.
    (b) The rate of contribution or cost is ordinarily an hourly rate, 
and will be reflected in the wage determination as such. In some cases, 
however, the contribution or cost for certain fringe benefits may be 
expressed in a formula or method of payment other than an hourly rate. 
In such cases, the Secretary may in his discretion express in the wage 
determination the rate of contribution or cost used in the formula or 
method or may convert it to

[[Page 136]]

an hourly rate of pay whenever he finds that such action would 
facilitate the administration of the Act. See Sec. 5.5(a)(1)(i) and 
(iii).



Sec. 5.26  ``* * * contribution irrevocably made * * * to a trustee or
to a third person''.

    Under the fringe benefits provisions (section 1(b)(2) of the Act) 
the amount of contributions for fringe benefits must be made to a 
trustee or to a third person irrevocably. The ``third person'' must be 
one who is not affiliated with the contractor or subcontractor. The 
trustee must assume the usual fiduciary responsibilities imposed upon 
trustees by applicable law. The trust or fund must be set up in such a 
way that in no event will the contractor or subcontractor be able to 
recapture any of the contributions paid in or any way divert the funds 
to his own use or benefit. Although contributions made to a trustee or 
third person pursuant to a benefit plan must be irrevocably made, this 
does not prevent return to the contractor or subcontractor of sums which 
he had paid in excess of the contributions actually called for by the 
plan, as where such excess payments result from error or from the 
necessity of making payments to cover the estimated cost of 
contributions at a time when the exact amount of the necessary 
contributions under the plan is not yet ascertained. For example, a 
benefit plan may provide for definite insurance benefits for employees 
in the event of the happening of a specified contingency such as death, 
sickness, accident, etc., and may provide that the cost of such definite 
benefits, either in full or any balance in excess of specified employee 
contributions, will be borne by the contractor or subcontractor. In such 
a case the return by the insurance company to the contractor or 
subcontractor of sums paid by him in excess of the amount required to 
provide the benefits which, under the plan, are to be provided through 
contributions by the contractor or subcontractor, will not be deemed a 
recapture or diversion by the employer of contributions made pursuant to 
the plan. (See Report of the Senate Committee on Labor and Public 
Welfare, S. Rep. No. 963, 88th Cong., 2d Sess., p. 5.)



Sec. 5.27  ``* * * fund, plan, or program''.

    The contributions for fringe benefits must be made pursuant to a 
fund, plan or program (sec. 1(b)(2)(A) of the act). The phrase ``fund, 
plan, or program'' is merely intended to recognize the various types of 
arrangements commonly used to provide fringe benefits through employer 
contributions. The phrase is identical with language contained in 
section 3(1) of the Welfare and Pension Plans Disclosure Act. In 
interpreting this phrase, the Secretary will be guided by the experience 
of the Department in administering the latter statute. (See Report of 
Senate Committee on Labor and Public Welfare, S. Rep. No. 963, 88th 
Cong., 2d Sess., p. 5.)



Sec. 5.28  Unfunded plans.

    (a) The costs to a contractor or subcontractor which may be 
reasonably anticipated in providing benefits of the types described in 
the act pursuant to an enforceable commitment to carry out a financially 
responsible plan or program, are considered fringe benefits within the 
meaning of the act (see 1(b)(2)(B) of the act). The legislative history 
suggests that these provisions were intended to permit the consideration 
of fringe benefits meeting, among others, these requirements and which 
are provided from the general assets of a contractor or subcontractor. 
(Report of the House Committee on Education and Labor, H. Rep. No. 308, 
88th Cong., 1st Sess., p. 4.)
    (b) No type of fringe benefit is eligible for consideration as a so-
called unfunded plan unless:
    (1) It could be reasonably anticipated to provide benefits described 
in the act;
    (2) It represents a commitment that can be legally enforced;
    (3) It is carried out under a financially responsible plan or 
program; and
    (4) The plan or program providing the benefits has been communicated 
in writing to the laborers and mechanics affected. (See S. Rep. No. 963, 
p. 6.)
    (c) It is in this manner that the act provides for the consideration 
of unfunded plans or programs in finding prevailing wages and in 
ascertaining compliance with the Act. At the same

[[Page 137]]

time, however, there is protection against the use of this provision as 
a means of avoiding the act's requirements. The words ``reasonably 
anticipated'' are intended to require that any unfunded plan or program 
be able to withstand a test which can perhaps be best described as one 
of actuarial soundness. Moreover, as in the case of other fringe 
benefits payable under the act, an unfunded plan or program must be 
``bona fide'' and not a mere simulation or sham for avoiding compliance 
with the act. (See S. Rep. No. 963, p. 6.) The legislative history 
suggests that in order to insure against the possibility that these 
provisions might be used to avoid compliance with the act, the committee 
contemplates that the Secretary of Labor in carrying out his 
responsibilities under Reorganization Plan No. 14 of 1950, may direct a 
contractor or subcontractor to set aside in an account assets which, 
under sound actuarial principles, will be sufficient to meet the future 
obligation under the plan. The preservation of this account for the 
purpose intended would, of course, also be essential. (S. Rep. No. 963, 
p. 6.) This is implemented by the contractual provisions required by 
Sec. 5.5(a)(1)(iv).



Sec. 5.29  Specific fringe benefits.

    (a) The act lists all types of fringe benefits which the Congress 
considered to be common in the construction industry as a whole. These 
include the following: 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 foregoing, 
unemployment benefits, life insurance, disability and sickness 
insurance, or accident insurance, vacation and holiday pay, defrayment 
of costs of apprenticeship or other similar programs, or 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 such 
benefits.
    (b) The legislative history indicates that it was not the intent of 
the Congress to impose specific standards relating to administration of 
fringe benefits. It was assumed that the majority of fringe benefits 
arrangements of this nature will be those which are administered in 
accordance with requirements of section 302(c)(5) of the National Labor 
Relations Act, as amended (S. Rep. No. 963, p. 5).
    (c) The term ``other bona fide fringe benefits'' is the so-called 
``open end'' provision. This was included so that new fringe benefits 
may be recognized by the Secretary as they become prevailing. It was 
pointed out that a particular fringe benefit need not be recognized 
beyond a particular area in order for the Secretary to find that it is 
prevailing in that area. (S. Rep. No. 963, p. 6).
    (d) The legislative reports indicate that, to insure against 
considering and giving credit to any and all fringe benefits, some of 
which might be illusory or not genuine, the qualification was included 
that such fringe benefits must be ``bona fide'' (H. Rep. No. 308, p. 4; 
S. Rep. No. 963, p. 6). No difficulty is anticipated in determining 
whether a particular fringe benefit is ``bona fide'' in the ordinary 
case where the benefits are those common in the construction industry 
and which are established under a usual fund, plan, or program. This 
would be typically the case of those fringe benefits listed in paragraph 
(a) of this section which are funded under a trust or insurance program. 
Contractors may take credit for contributions made under such 
conventional plans without requesting the approval of the Secretary of 
Labor under Sec. 5.5(a)(1)(iv).
    (e) Where the plan is not of the conventional type described in the 
preceding paragraph, it will be necessary for the Secretary to examine 
the facts and circumstances to determine whether they are ``bona fide'' 
in accordance with requirements of the act. This is particularly true 
with respect to unfunded plans. Contractors or subcontractors seeking 
credit under the act for costs incurred for such plans must request 
specific permission from the Secretary under Sec. 5.5(a)(1)(iv).
    (f) The act excludes fringe benefits which a contractor or 
subcontractor is obligated to provide under other Federal, State, or 
local law. No credit may

[[Page 138]]

be taken under the act for the payments made for such benefits. For 
example, payment for workmen's compensation insurance under either a 
compulsory or elective State statute are not considered payments for 
fringe benefits under the Act. While each situation must be separately 
considered on its own merits, payments made for travel, subsistence or 
to industry promotion funds are not normally payments for fringe 
benefits under the Act. The omission in the Act of any express reference 
to these payments, which are common in the construction industry, 
suggests that these payments should not normally be regarded as bona 
fide fringe benefits under the Act.



Sec. 5.30  Types of wage determinations.

    (a) When fringe benefits are prevailing for various classes of 
laborers and mechanics in the area of proposed construction, such 
benefits are includable in any Davis-Bacon wage determination. 
Illustrations, contained in paragraph (c) of this section, demonstrate 
some of the different types of wage determinations which may be made in 
such cases.
    (b) Wage determinations of the Secretary of Labor under the act do 
not include fringe benefits for various classes of laborers and 
mechanics whenever such benefits do not prevail in the area of proposed 
construction. When this occurs the wage determination will contain only 
the basic hourly rates of pay, that is only the cash wages which are 
prevailing for the various classes of laborers and mechanics. An 
illustration of this situation is contained in paragraph (c) of this 
section.
    (c) Illustrations:

----------------------------------------------------------------------------------------------------------------
                                                                     Fringe benefits payments
                                         Basic   ---------------------------------------------------------------
               Classes                  hourly    Health and                          Apprenticeship
                                         rates      welfare    Pensions    Vacations      program       Others
----------------------------------------------------------------------------------------------------------------
Laborers............................       $3.25  ..........  ..........  ..........  ..............  ..........
Carpenters..........................        4.00       $0.15  ..........  ..........  ..............  ..........
Painters............................        3.90         .15       $0.10       $0.20  ..............  ..........
Electricians........................        4.85         .10         .15  ..........  ..............  ..........
Plumbers............................        4.95         .15         .20  ..........         $0.05    ..........
Ironworkers.........................        4.60  ..........  ..........         .10  ..............  ..........
----------------------------------------------------------------------------------------------------------------
(It should be noted this format is not necessarily in the exact form in which determinations will issue; it is
  for illustration only.)



Sec. 5.31  Meeting wage determination obligations.

    (a) A contractor or subcontractor performing work subject to a 
Davis-Bacon wage determination may discharge his minimum wage 
obligations for the payment of both straight time wages and fringe 
benefits by paying in cash, making payments or incurring costs for 
``bona fide'' fringe benefits of the types listed in the applicable wage 
determination or otherwise found prevailing by the Secretary of Labor, 
or by a combination thereof.
    (b) A contractor or subcontractor may discharge his obligations for 
the payment of the basic hourly rates and the fringe benefits where both 
are contained in a wage determination applicable to his laborers or 
mechanics in the following ways:
    (1) By paying not less than the basic hourly rate to the laborers or 
mechanics and by making the contributions for the fringe benefits in the 
wage determinations, as specified therein. For example, in the 
illustration contained in paragraph (c) of Sec. 5.30, the obligations 
for ``painters'' will be met by the payment of a straight time hourly 
rate of not less than $3.90 and by contributing not less than at the 
rate of 15 cents an hour for health and welfare benefits, 10 cents an 
hour for pensions, and 20 cents an hour for vacations; or
    (2) By paying not less than the basic hourly rate to the laborers or 
mechanics and by making contributions for ``bona fide'' fringe benefits 
in a total amount not less than the total of the fringe benefits 
required by the wage determination. For example, the obligations for 
``painters'' in the illustration in paragraph (c) of Sec. 5.30 will be 
met by the payment of a straight time hourly rate of not less than $3.90 
and by contributions of not less than a total of 45

[[Page 139]]

cents an hour for ``bona fide'' fringe benefits; or
    (3) By paying in cash directly to laborers or mechanics for the 
basic hourly rate and by making an additional cash payment in lieu of 
the required benefits. For example, where an employer does not make 
payments or incur costs for fringe benefits, he would meet his 
obligations for ``painters'' in the illustration in paragraph (c) of 
Sec. 5.30, by paying directly to the painters a straight time hourly 
rate of not less than $4.35 ($3.90 basic hourly rate plus 45 cents for 
fringe benefits); or
    (4) As stated in paragraph (a) of this section, the contractor or 
subcontractor may discharge his minimum wage obligations for the payment 
of straight time wages and fringe benefits by a combination of the 
methods illustrated in paragraphs (b)(1) thru (3) of this section. Thus, 
for example, his obligations for ``painters'' may be met by an hourly 
rate, partly in cash and partly in payments or costs for fringe benefits 
which total not less than $4.35 ($3.90 basic hourly rate plus 45 cents 
for fringe benefits). The payments in such case may be $4.10 in cash and 
25 cents in payments or costs in fringe benefits. Or, they may be $3.75 
in cash and 60 cents in payments or costs for fringe benefits.

[30 FR 13136, Oct. 15, 1965]



Sec. 5.32  Overtime payments.

    (a) The act excludes amounts paid by a contractor or subcontractor 
for fringe benefits in the computation of overtime under the Fair Labor 
Standards Act, the Contract Work Hours and Safety Standards Act, and the 
Walsh-Healey Public Contracts Act whenever the overtime provisions of 
any of these statutes apply concurrently with the Davis-Bacon Act or its 
related prevailing wage statutes. It is clear from the legislative 
history that in no event can the regular or basic rate upon which 
premium pay for overtime is calculated under the aforementioned Federal 
statutes be less than the amount determined by the Secretary of Labor as 
the basic hourly rate (i.e. cash rate) under section 1(b)(1) of the 
Davis-Bacon Act. (See S. Rep. No. 963, p. 7.) Contributions by employees 
are not excluded from the regular or basic rate upon which overtime is 
computed under these statutes; that is, an employee's regular or basic 
straight-time rate is computed on his earnings before any deductions are 
made for the employee's contributions to fringe benefits. The 
contractor's contributions or costs for fringe benefits may be excluded 
in computing such rate so long as the exclusions do not reduce the 
regular or basic rate below the basic hourly rate contained in the wage 
determination.
    (b) The legislative report notes that the phrase ``contributions 
irrevocably made by a contractor or subcontractor to a trustee or to a 
third person pursuant to a fund, plan, or program'' was added to the 
bill in Committee. This language in essence conforms to the overtime 
provisions of section 7(d)(4) of the Fair Labor Standards Act, as 
amended. The intent of the committee was to prevent any avoidance of 
overtime requirements under existing law. See H. Rep. No. 308, p. 5.
    (c)(1) The act permits a contractor or subcontractor to pay a cash 
equivalent of any fringe benefits found prevailing by the Secretary of 
Labor. Such a cash equivalent would also be excludable in computing the 
regular or basic rate under the Federal overtime laws mentioned in 
paragraph (a). For example, the W construction contractor pays his 
laborers or mechanics $3.50 in cash under a wage determination of the 
Secretary of Labor which requires a basic hourly rate of $3 and a fringe 
benefit contribution of 50 cents. The contractor pays the 50 cents in 
cash because he made no payments and incurred no costs for fringe 
benefits. Overtime compensation in this case would be computed on a 
regular or basic rate of $3.00 an hour. However, in some cases a 
question of fact may be presented in ascertaining whether or not a cash 
payment made to laborers or mechanics is actually in lieu of a fringe 
benefit or is simply part of their straight time cash wage. In the 
latter situation, the cash payment is not excludable in computing 
overtime compensation. Consider the examples set forth in paragraphs 
(c)(2) and (3) of this section.
    (2) The X construction contractor has for some time been paying 
$3.25 an

[[Page 140]]

hour to a mechanic as his basic cash wage plus 50 cents an hour as a 
contribution to a welfare and pension plan. The Secretary of Labor 
determines that a basic hourly rate of $3 an hour and a fringe benefit 
contribution of 50 cents are prevailing. The basic hourly rate or 
regular rate for overtime purposes would be $3.25, the rate actually 
paid as a basic cash wage for the employee of X, rather than the $3 rate 
determined as prevailing by the Secretary of Labor.
    (3) Under the same prevailing wage determination, discussed in 
paragraph (c)(2) of this section, the Y construction contractor who has 
been paying $3 an hour as his basic cash wage on which he has been 
computing overtime compensation reduces the cash wage to $2.75 an hour 
but computes his costs of benefits under section 1(b)(2)(B) as $1 an 
hour. In this example the regular or basic hourly rate would continue to 
be $3 an hour. See S. Rep. No. 963, p. 7.



 PART 6_RULES OF PRACTICE FOR ADMINISTRATIVE PROCEEDINGS ENFORCING LABOR
 STANDARDS IN FEDERAL AND FEDERALLY ASSISTED CONSTRUCTION CONTRACTS AND
 FEDERAL SERVICE CONTRACTS--Table of Contents



                            Subpart A_General

Sec.
6.1  Applicability of rules.
6.2  Definitions.
6.3  Service; copies of documents and pleadings.
6.4  Subpoenas (Service Contract Act).
6.5  Production of documents and witnesses.
6.6  Administrative Law Judge.
6.7  Appearances.
6.8  Transmission of record.

 Subpart B_Enforcement Proceedings Under the Service Contract Act (and 
  Under the Contract Work Hours and Safety Standards Act for Contracts 
                  Subject to the Service Contract Act)

6.15  Complaints.
6.16  Answers.
6.17  Amendments to pleadings.
6.18  Consent findings and order.
6.19  Decision of the Administrative Law Judge.
6.20  Petition for review.
6.21  Ineligible list.

Subpart C_Enforcement Proceedings Under the Davis-Bacon Act and Related 
Prevailing Wage Statutes, the Copeland Act, and the Contract Work Hours 
and Safety Standards Act (Except Under Contracts Subject to the Service 
                              Contract Act)

6.30  Referral to Chief Administrative Law Judge.
6.31  Amendments to pleadings.
6.32  Consent findings and order.
6.33  Decision of the Administrative Law Judge.
6.34  Petition for review.
6.35  Ineligible lists.

               Subpart D_Substantial Interest Proceedings

6.40  Scope.
6.41  Referral to Chief Administrative Law Judge.
6.42  Amendments to pleadings.
6.43  Consent findings and order.
6.44  Decision of the Administrative Law Judge.
6.45  Petition for review.
6.46  Ineligible list.

       Subpart E_Substantial Variance and Arm's-Length Proceedings

6.50  Scope.
6.51  Referral to Chief Administrative Law Judge.
6.52  Appointment of Administrative Law Judge and notification of 
          prehearing conference and hearing date.
6.53  Prehearing conference.
6.54  Hearing.
6.55  Closing of record.
6.56  Decision of the Administrative Law Judge.
6.57  Petition for review.

    Authority: Secs. 4 and 5, 79 Stat. 1034, 1035 as amended by 86 Stat. 
789, 790, 41 U.S.C. 353 and 354; 5 U.S.C. 301; Reorg. Plan No. 14 of 
1950, 64 Stat. 1267, 5 U.S.C. Appendix; 46 Stat. 1494, as amended by 49 
Stat. 1011, 78 Stat. 238, 40 U.S.C. 276a-276a-7; 76 Stat. 357-359, 40 
U.S.C. 327-332; 48 Stat. 948, as amended by 63 Stat. 108, 72 Stat. 967, 
40 U.S.C. 276c.

    Source: 49 FR 10627, Mar. 21, 1984, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 6 appear at 61 FR 
19984, May 3, 1996.

[[Page 141]]



                            Subpart A_General



Sec. 6.1  Applicability of rules.

    This part provides the rules of practice for administrative 
proceedings under the Service Contract Act, the Davis-Bacon Act and 
related statutes listed in Sec. 5.1 of part 5 of this title which 
require payment of wages determined in accordance with the Davis-Bacon 
Act, the Contract Work Hours and Safety Standards Act, and the Copeland 
Act. See parts 4 and 5 of this title.



Sec. 6.2  Definitions.

    (a) Administrator means the Administrator of the Wage and Hour 
Division, U.S. Department of Labor, or authorized representative.
    (b) Associate Solicitor means the Associate Solicitor for Fair Labor 
Standards, Office of the Solicitor, U.S. Department of Labor, 
Washington, DC 20210.
    (c) Chief Administrative Law Judge means the Chief Administrative 
Law Judge, U.S. Department of Labor, 800 K Street, NW., Suite 400, 
Washington DC 20001-8002.
    (d) Respondent means the contractor, subcontractor, person alleged 
to be responsible under the contract or subcontract, and/or any firm, 
corporation, partnership, or association in which such person or firm is 
alleged to have a substantial interest (or interest, if the proceeding 
is under the Davis-Bacon Act) against whom the proceedings are brought.

[49 FR 10627, Mar. 21, 1984, as amended at 56 FR 54708, Oct. 22, 1991; 
82 FR 2226, Jan. 9, 2017]



Sec. 6.3  Service; copies of documents and pleadings.

    (a) Manner of service. Service upon any party shall be made by the 
party filing the pleading or document by delivering a copy or mailing a 
copy to the last known address. When a party is represented by an 
attorney, the service should be upon the attorney.
    (b) Proof of service. A certificate of the person serving the 
pleading or other document by personal delivery or by mailing, setting 
forth the manner of said service shall be proof of the service. Where 
service is made by mail, service shall be complete upon mailing. 
However, documents are not deemed filed until received by the Chief 
Clerk at the Office of Administrative Law Judges and where documents are 
filed by mail 5 days shall be added to the prescribed period.
    (c) Service upon Department, number of copies of pleading or other 
documents. An original and three copies of all pleadings and other 
documents shall be filed with the Department of Labor: The original and 
one copy with the Administrative Law Judge before whom the case is 
pending, one copy with the attorney representing the Department during 
the hearing, and one copy with the Associate Solicitor.



Sec. 6.4  Subpoenas (Service Contract Act).

    All applications under the Service Contract Act for subpoenas ad 
testificandum and subpoenas duces tecum shall be made in writing to the 
Administrative Law Judge. Application for subpoenas duces tecum shall 
specify as exactly as possible the documents to be produced.



Sec. 6.5  Production of documents and witnesses.

    The parties, who shall be deemed to be the Department of Labor and 
the respondent(s), may serve on any other party a request to produce 
documents or witnesses in the control of the party served, setting forth 
with particularity the documents or witnesses requested. The party 
served shall have 15 days to respond or object thereto unless a shorter 
or longer time is ordered by the Administrative Law Judge. The parties 
shall produce documents and witnesses to which no privilege attaches 
which are in the control of the party, if so ordered by the 
Administrative Law Judge upon motion therefor by a party. If a privilege 
is claimed, it must be specifically claimed in writing prior to the 
hearing or orally at the hearing or deposition, including the reasons 
therefor. In no event shall a statement taken in confidence by the 
Department of Labor or other Federal agency be ordered to be produced 
prior to the date of testimony at trial of the person whose statement is 
at issue unless the consent of such person has been obtained.

[[Page 142]]



Sec. 6.6  Administrative Law Judge.

    (a) Equal Access to Justice Act. Proceedings under this part are not 
subject to the provisions of the Equal Access to Justice Act (Pub. L. 
96-481). In any hearing conducted pursuant to the provisions of this 
part 6, Administrative Law Judges shall have no power or authority to 
award attorney fees and/or other litigation expenses pursuant to the 
provisions of the Equal Access to Justice Act.
    (b) Contumacious conduct: failure or refusal of a witness to appear 
or answer. Contumacious conduct at any hearing before an Administrative 
Law Judge shall be ground for exclusion from the hearing., In cases 
arising under the Service Contract Act, the failure or refusal of a 
witness to appear at any hearing or at a deposition when so ordered by 
the Administrative Law Judge, or to answer any question which has been 
ruled to be proper, shall be ground for the action provided in section 5 
of the Act of June 30, 1936 (41 U.S.C. 39) and, in the discretion of the 
Administrative Law Judge, for striking out all or part of the testimony 
which may have been given by such witness.



Sec. 6.7  Appearances.

    (a) Representation. The parties may appear in person, by counsel, or 
otherwise.
    (b) Failure to appear. In the event that a party appears at the 
hearing and no party appears for the opposing side, the presiding 
Administrative Law Judge is authorized, if such party fails to show good 
cause for such failure to appear, to dismiss the case or to find the 
facts as alleged in the complaint and to enter a default judgment 
containing such findings, conclusions and order as are appropriate. Only 
where a petition for review of such default judgment cites alleged 
procedural irregularities in the proceeding below and not the merits of 
the case shall a non-appearing party be permitted to file such a 
petition for review. Failure to appear at a hearing shall not be deemed 
to be a waiver of the right to be served with a copy of the 
Administrative Law Judge's decision.



Sec. 6.8  Transmission of record.

    If a petition for review of the Administrative Law Judge's decision 
is filed with the Administrative Review Board, the Chief Administrative 
Law Judge shall promptly transmit the record of the proceeding.
    If a petition for review is not filed within the time prescribed in 
this part, the Chief Administrative Law Judge shall so advise the 
Administrator.



 Subpart B_Enforcement Proceedings Under the Service Contract Act (and 
  Under the Contract Work Hours and Safety Standards Act for Contracts 
                  Subject to the Service Contract Act)



Sec. 6.15  Complaints.

    (a) Enforcement proceedings under the Service Contract Act and under 
the Contract Work Hours and Safety Standards Act for contracts subject 
to the Service Contract Act, may be instituted by the Associate 
Solicitor for Fair Labor Standards or a Regional Solicitor by issuing a 
complaint and causing the complaint to be served upon the respondent.
    (b) The complaint shall contain a clear and concise factual 
statement of the grounds for relief and the relief requested.
    (c) The Administrative Law Judge shall notify the parties of the 
time and place for a hearing.



Sec. 6.16  Answers.

    (a) Within 30 days after the service of the complaint the respondent 
shall file an answer with the Chief Administrative Law Judge. The answer 
shall be signed by the respondent or his/her attorney.
    (b) The answer shall (1) contain a statement of the facts which 
constitute the grounds of defense, and shall specifically admit, 
explain, or deny each of the allegations of the complaint unless the 
respondent is without knowledge, in which case the answer shall so 
state; or (2) state that the respondent admits all of the allegations of 
the complaint. The answer may contain a

[[Page 143]]

waiver of hearing. Failure to file an answer to or plead specifically to 
any allegation of the complaint shall constitute an admission of such 
allegation.
    (c) Failure to file an answer shall constitute grounds for waiver of 
hearing and entry of a default judgment unless respondent shows good 
cause for such failure to file. In preparing the decision of default 
judgment the Administrative Law Judge shall adopt as findings of fact 
the material facts alleged in the complaint and shall order the 
appropriate relief and/or sanctions.



Sec. 6.17  Amendments to pleadings.

    At any time prior to the close of the hearing record, the complaint 
or answer may be amended with the permission of the Administrative Law 
Judge and on such terms as he/she may approve. When issues not raised by 
the pleadings are reasonably within the scope of the original complaint 
and are tried by express or implied consent of the parties, they shall 
be treated in all respects as if they had been raised in the pleadings, 
and such amendments may be made as necessary to make them conform to the 
evidence. Such amendments shall be allowed when justice and the 
presentation of the merits are served thereby, provided there is no 
prejudice to the objecting party's presentation on the merits. A 
continuance in the hearing may be granted or the record left open to 
enable the new allegations to be addressed. The presiding Administrative 
Law Judge may, upon reasonable notice and upon such terms as are just, 
permit supplemental pleadings setting forth transactions, occurrences or 
events which have happened since the data of the pleadings and which are 
relevant to any of the issues involved.



Sec. 6.18  Consent findings and order.

    (a) At any time prior to the receipt of evidence or, at the 
discretion of the Administrative Law Judge, prior to the issuance of the 
decision of the Administrative Law Judge, the parties may enter into 
consent findings and an order disposing of the processings in whole or 
in part.
    (b) Any agreement containing consent findings and an order disposing 
of a proceeding in whole or in part shall also provide:
    (1) That the order shall have the same force and effect as an order 
made after full hearing;
    (2) That the entire record on which any order may be based shall 
consist solely of the complaint and the agreement;
    (3) A waiver of any further procedural steps before the 
Administrative Law Judge and Administrative Review Board regarding those 
matters which are the subject of the agreement; and
    (4) A waiver of any right to challenge or contest the validity of 
the findings and order entered into in accordance with the agreement.
    (c) Within 30 days after receipt of an agreement containing consent 
findings and an order disposing of the disputed matter in whole, the 
Administrative Law Judge shall, if satisfied with its form and 
substance, accept such agreement by issuing a decision based upon the 
agreed findings and order. If such agreement disposes of only a part of 
the disputed matter, a hearing shall be conducted on the matters 
remaining in dispute.



Sec. 6.19  Decision of the Administrative Law Judge.

    (a) Proposed findings of fact, conclusions, and order. Within 20 
days of filing of the transcript of the testimony or such additional 
time as the Administrative Law Judge may allow each party may file with 
the Administrative Law Judge proposed findings of fact, conclusion of 
law, and order, together with a supporting brief expressing the reasons 
for such proposals. Such proposals and brief shall be served on all 
parties, and shall refer to all portions of the record and to all 
authorities relied upon in support of each proposal.
    (b) Decision of the Administrative Law Judge. (1) Within a 
reasonable time after the time allowed for the filing of proposed 
findings of fact, conclusions of law, and order, or within 30 days after 
receipt of an agreement containing consent findings and order disposing 
of the disputed matter in whole, the Administrative Law Judge shall make 
his/her decision. If any aggrieved party desires review of the decision, 
a petition for review thereof shall be

[[Page 144]]

filed as provided in Sec. 6.20 of this title, and such decision and 
order shall be inoperative unless and until the Administrative Review 
Board issues an order affirming the decision. The decision of the 
Administrative Law Judge shall include findings of fact and conclusions 
of law, with reasons and bases therefor, upon each material issue of 
fact, law, or discretion presented on the record. The decision of the 
Administrative Law Judge shall be based upon a consideration of the 
whole record, including any admissions made under Secs. 6.16, 6.17 and 
6.18 of this title. It shall be supported by reliable and probative 
evidence. Such decision shall be in accordance with the regulations and 
rulings contained in parts 4 and 5 and other pertinent parts of this 
title.
    (2) If the respondent is found to have violated the Service Contract 
Act, the Administrative Law Judge shall include in his/her decision an 
order as to whether the respondent is to be relieved from the ineligible 
list as provided in section 5(a) of the Act, and, if relief is ordered, 
findings of the unusual circumstance, within the meaning of section 5(a) 
of the Act, which are the basis therefor. If respondent is found to have 
violated the provisions of the Contract Work Hours and Safety Standards 
Act, the Administrative Law Judge shall issue an order as to whether the 
respondent is to be subject to the ineligible list as provided in 
Sec. 5.12(a)(1) of part 4 of this title, including findings regarding 
the existence of aggravated or willful violations. If wages and/or 
fringe benefits are found due under the Service Contract Act and/or the 
Contract Work Safety Standards Act and are unpaid, no relief from the 
ineligible list shall be ordered except on condition that such wages 
and/or fringe benefits are paid.
    (3) The Administrative Law Judge shall make no findings regarding 
liquidated damages under the Contract Work Hours and Safety Standards 
Act.



Sec. 6.20  Petition for review.

    Within 40 days after the date of the decision of the Administrative 
Law Judge (or such additional time as is granted by the Administrative 
Review Board), any party aggrieved thereby who desires review thereof 
shall file a petition for review of the decision with supporting 
reasons. Such party shall transmit the petition in writing to the 
Administrative Review Board pursuant to 29 CFR part 8, with a copy 
thereof to the Chief Administrative Law Judge. The petition shall refer 
to the specific findings of fact, conclusions of law, or order at issue. 
A petition concerning the decision on the ineligibility list shall also 
state the unusual circumstances or lack thereof under the Service 
Contract Act, and/or the aggravated or willful violations of the 
Contract Work Hours and Safety Standards Act or lack thereof, as 
appropriate.



Sec. 6.21  Ineligible list.

    (a) Upon the final decision of the Administrative Law Judge or 
Administrative Review Board, as appropriate, the Administrator shall 
within 90 days forward to the Comptroller General the name of any 
respondent found in violation of the Service Contract Act, including the 
name of any firm, corporation, partnership, or association in which the 
respondent has a substantial interest, unless such decision orders 
relief from the ineligible list because of unusual circumstances.
    (b) Upon the final decision of the Administrative Law Judge or the 
Administrative Review Board, as appropriate, the Administrator promptly 
shall forward to the Comptroller General the name of any respondent 
found to be in aggravated or willful violation of the Contract Work 
Hours and Safety Standards Act, and the name of any firm, corporation, 
partnership, or association in which the respondent has a substantial 
interest.

[[Page 145]]



Subpart C_Enforcement Proceedings Under the Davis-Bacon Act and Related 
Prevailing Wage Statutes, the Copeland Act, and the Contract Work Hours 
and Safety Standards Act (Except Under Contracts Subject to the Service 
                              Contract Act)



Sec. 6.30  Referral to Chief Administrative Law Judge.

    (a) Upon timely receipt of a request for a hearing under Sec. 5.11 
(where the Administrator has determined that relevant facts are in 
dispute) or Sec. 5.12 of part 5 of this title, the Administrator shall 
refer the case to the Chief Administrative Law Judge by Order of 
Reference, to which shall be attached a copy of the notification letter 
to the respondent from the Administrator and response thereto, for 
designation of an Administrative Law Judge to conduct such hearings as 
may be necessary to decide the disputed matters. A copy of the Order of 
Reference and attachments thereto shall be served upon the respondent.
    (b) The notification letter from the Administrator and response 
thereto shall be given the effect of a complaint and answer, 
respectively, for purposes of the administrative proceedings. The 
notification letter and response shall be in accordance with the 
provisions of Sec. 5.11 or Sec. 5.12(b)(1) of part 5 of this title, as 
appropriate.



Sec. 6.31  Amendments to pleadings.

    At any time prior to the closing of the hearing record, the 
complaint (notification letter) or answer (response) may be amended with 
the permission of the Administrative Law Judge and upon such terms as 
he/she may approve. For proceedings pursuant to Sec. 5.11 of part 5 of 
this title, such an amendment may include a statement that debarment 
action is warranted under Sec. 5.12(a)(1) of part 5 of this title or 
under section 3(a) of the Davis-Bacon Act. Such amendments shall be 
allowed when justice and the presentation of the merits are served 
thereby, provided there is no prejudice to the objecting party's 
presentation on the merits. When issues not raised by the pleadings are 
reasonably within the scope of the original complaint and are tried by 
express or implied consent of the parties, they shall be treated in all 
respects as if they had been raised in the pleadings, and such 
amendments may be made as necessary to make them conform to the 
evidence. The presiding Administrative Law Judge may, upon reasonable 
notice and upon such terms as are just, permit supplemental pleadings 
setting forth transactions, occurrences or events which have happened 
since the date of the pleadings and which are relevant to any of the 
issues involved. A continuance in the hearing may be granted or the 
record left open to enable the new allegations to be addressed.



Sec. 6.32  Consent findings and order.

    (a) At any time prior to the receipt of evidence or, at the 
discretion of the Administrative Law Judge, prior to the issuance of the 
decision of the Administrative Law Judge, the parties may enter into 
consent findings and an order disposing of the proceeding in whole or in 
part.
    (b) Any agreement containing consent findings and an order disposing 
of a proceeding in whole or in part shall also provide:
    (1) That the order shall have the same force and effect as an order 
made after full hearing;
    (2) That the entire record on which any order may be based shall 
consist solely of the complaint and the agreement;
    (3) That any order concerning debarment under the Davis-Bacon Act 
(but not under any of the other statutes listed in Sec. 5.1 of part 5 of 
this title) shall constitute a recommendation to the Comptroller 
General;
    (4) A waiver of any further procedural steps before the 
Administrative Law Judge and the Administrative Review Board regarding 
those matters which are the subject of the agreement; and
    (5) A waiver of any right to challenge or contest the validity of 
the findings and order entered into in accordance with the agreement.
    (c) Within 30 days after receipt of an agreement containing consent 
findings and an order disposing of the disputed

[[Page 146]]

matter in whole, the Administrative Law Judge shall, if satisfied with 
its form and substance, accept such agreement by issuing a decision 
based upon the agreed findings and order. If such agreement disposes of 
only a part of the disputed matter, a hearing shall be conducted on the 
matters remaining in dispute.



Sec. 6.33  Decision of the Administrative Law Judge.

    (a) Proposed findings of fact, conclusions, and order. Within 20 
days of filing of the transcript of the testimony or such additional 
time as the Administrative Law Judge may allow, each party may file with 
the Administrative Law Judge proposed findings of fact, conclusions of 
law, and order, together with a supporting brief expressing the reasons 
for such proposals. Such proposals and brief shall be served on all 
parties, and shall refer to all portions of the record and to all 
authorities relied upon in support of each proposal.
    (b) Decision of the Administrative Law Judge. (1) Within a 
reasonable time after the time allowed for filing of proposed findings 
of fact, conclusions of law, and order, or within 30 days of receipt of 
an agreement containing consent findings and order disposing of the 
disputed matter in whole, the Administrative Law Judge shall make his/
her decision. If any aggrieved party desires review of the decision, a 
petition for review thereof shall be filed as provided in Sec. 6.34 of 
this title, and such decision and order shall be inoperative unless and 
until the Administrative Review Board either declines to review the 
decision or issues an order affirming the decision. The decision of the 
Administrative Law Judge shall include findings of fact and conclusions 
of law, with reasons and bases therefor, upon each material issue of 
fact, law, or discretion presented on the record. Such decision shall be 
in accordance with the regulations and rulings contained in part 5 and 
other pertinent parts of this title. The decision of the Administrative 
Law Judge shall be based upon a consideration of the whole record, 
including any admissions made in the respondent's answer (response) and 
Sec. 6.32 of this title. It shall be supported by reliable and probative 
evidence.
    (2) If the respondent is found to have violated the labor standards 
provisions of any of the statutes listed in Sec. 5.1 of part 5 of this 
title other than the Davis-Bacon Act, and if debarment action was 
requested pursuant to the complaint (notification letter) or any 
amendment thereto, the Administrative Law Judge shall issue an order as 
to whether the respondent is to be subject to the ineligible list as 
provided in Sec. 5.12(a)(1) of this title, including any findings of 
aggravated or willful violations. If the respondent is found to have 
violated the Davis-Bacon Act, and if debarment action was requested, the 
Administrative Law Judge shall issue as a part of the order a 
recommendation as to whether respondent should be subject to the 
ineligible list pursuant to section 3(a) of the Act, including any 
findings regarding respondent's disregard of obligations to employees 
and subcontractors. If wages are found due and are unpaid, no relief 
from the ineligible list shall be ordered or recommended except on 
condition that such wages are paid.
    (3) The Administrative Law Judge shall make no findings regarding 
liquidated damages under the Contract Work Hours and Safety Standards 
Act.



Sec. 6.34  Petition for review.

    Within 40 days after the date of the decision of the Administrative 
Law judge (or such additional time as is granted by the Administrative 
Review Board). any party aggrieved thereby who desires review thereof 
shall file a petition for review of the decision with supporting 
reasons. Such party shall transmit the petition in writing to the 
Administrative Review Board, pursuant to part 7 of this title, with a 
copy thereof to the Chief Administrative Law judge. The petition shall 
refer to the specific findings of fact, conclusions of law, or order at 
issue. A petition concerning the decision on debarment shall also state 
the aggravated or willful violations and/or disregard of obligations to 
employees and subcontractors, or lack thereof, as appropriate.

[[Page 147]]



Sec. 6.35  Ineligible lists.

    Upon the final decision of the Administrative Law Judge or 
Administrative Review Board, as appropriate, regarding violations of any 
statute listed in Sec. 5.1 of part 5 of this title other than the Davis-
Bacon Act, the Administrator promptly shall foward to the Comptroller 
General the name of any respondent found to have committed aggravated or 
willful violations of the labor standards provisions of such statute, 
and the name of any firm, corporation, partnership, or association in 
which such respondent has a substantial interest. Upon the final 
decision of the Administrative Law Judge or Administrative Review Board, 
as appropriate, regarding violations of the Davis-Bacon Act, the 
Administrator promptly shall forward to the Comptroller General any 
recommendation regarding debarment action against a respondent, and the 
name of any firm, corporation, partnership, or association in which such 
respondent has an interest.



               Subpart D_Substantial Interest Proceedings



Sec. 6.40  Scope.

    This subpart supplements the procedures contained in Sec. 4.12 of 
part 4 and Sec. 5.12(d) of part 5 of this title, and states the rules of 
practice applicable to hearings to determine whether persons of firms 
whose names appear on the ineligible list pursuant to section 5(a) of 
the Service Contract Act or Sec. 5.12(a)(1) of part 5 of this title have 
a substantial interest in any firm, corporation, partnership, or 
association other than those listed on the ineligible list; and/or to 
determine whether persons or firms whose names appear on the ineligible 
list pursuant to section 3(a) of the Davis-Bacon Act have an interest in 
any firm, corporation, partnership, or association other than those 
listed on the ineligible list.



Sec. 6.41  Referral to Chief Administrative Law Judge.

    (a) Upon timely receipt of a request for a hearing under Sec. 4.12 
of part 4 or Sec. 5.12 of part 5 of this title, where the Administrator 
has determined that relevant facts are in dispute, or on his/her own 
motion, the Administrator shall refer the case to the Chief 
Administrative Law Judge by Order of Reference, to which shall be 
attached a copy of any findings of the Administrator and response 
thereto, for designation of an Administrative Law Judge to conduct such 
hearings as may be necessary to decide the disputed matters. A copy of 
the Order of Reference and attachments thereto shall be served upon the 
person or firm requesting the hearing, if any and upon the respondents.
    (b) The findings of the Administrator and response thereto shall be 
given the effect of a complaint and answer, respectively, for purposes 
of the administrative proceedings.



Sec. 6.42  Amendments to pleadings.

    At any time prior to the closing of the hearing record, the 
complaint (Administrator's findings) or answer (response) may be amended 
with the permission of the Administrative Law Judge and upon such terms 
as he/she may approve. Such amendments shall be allowed when justice and 
the presentation of the merits are served thereby, provided there is no 
prejudice to the objecting party's presentation on the merits. When 
issues not raised by the pleadings are reasonably within the scope of 
the original complaint and are tried by express or implied consent of 
the parties, they shall be treated in all respects as if they had been 
raised in the pleadings, and such amendments may be made as necessary to 
make them conform to the evidence. The presiding Administative Law Judge 
may, upon such terms as are just, permit supplemental pleadings setting 
forth transactions, occurrences or events which have happened a since 
the data of the pleadings and which are relevant to any of the issues 
involved. A continuance in the hearing may be granted or the record left 
open to enable the new allegations to be addressed.



Sec. 6.43  Consent findings and order.

    (a) At any time prior to the receipt of evidence or, at the 
discretion of the Administrative Law Judge, prior to the issuance of the 
decision of the Administrative Law Judge, the parties may enter into 
consent findings and an

[[Page 148]]

order disposing of the proceeding in whole or in part.
    (b) Any agreement containing consent findings and an order disposing 
of a proceeding in whole or in part shall provide:
    (1) That the order shall have the same force and effect as an order 
made after full hearing:
    (2) That the entire record on which any order may be based shall 
consist solely of the complaint and the agreement;
    (3) A waiver of any further procedural steps before the 
Administrative Law Judge and the Administrative Review Board, as 
appropriate, regarding those matters which are the subject of the 
agreement; and
    (4) A waiver of any right to challenge or contest the validity of 
the findings and order entered into in accordance with the agreement.
    (c) Within 30 days after receipt of an agreement containing consent 
findings and an order disposing of the disputed matter in whole, the 
Administrative Law Judge shall accept such agreement by issuing a 
decision based upon the agreed findings and order. If a such agreement 
disposes of only a part of the disputed matter, a hearing shall be 
conducted on the matters remaining in dispute.



Sec. 6.44  Decision of the Administrative Law Judge.

    (a) Proposed findings of fact, conclusions, and order. Within 30 
days of filing of the transcript of the testimony, each party may file 
with the Administrative Law Judge proposed findings of fact, conclusions 
of law, and order, together with a supporting brief expressing the 
reasons for such proposals. Such proposals and brief shall be served on 
all parties, and shall refer to all portions of the record and to all 
authorities relied upon in support of each proposal.
    (b) Decision of the Administrative Law Judge. Within 60 days after 
the time allowed for filing of proposed findings of fact, conclusions of 
law, and order, or within 30 days after receipt of an agreement 
containing consent findings and order disposing of the disputed matter 
in whole, the Administrative Law Judge shall make his/her decision. If 
any aggrieved party desires review of the decision a petition for review 
thereof shall be filed as provided in Sec. 6.45 of this title, and such 
decision and order shall be inoperative unless and until the 
Administrative Review Board issues an order affirming the decision. The 
decision of the Administrative Law Judge shall include findings of fact 
and conclusions of law, with reasons and bases therefor, upon each 
material issue of fact, law, or discretion presented on the record. Such 
decision shall be in accordance with the regulations and rulings 
contained in parts 4 and 5 and other pertinent parts of this title. The 
decision of the Administrative Law Judge shall be based upon a 
consideration of the whole record, including any admissions made in the 
respondents' answer (response) and Sec. 6.43 of this title.



Sec. 6.45  Petition for review.

    Within 30 days after the date of the decision of the Administrative 
Law Judge, any party aggrieved thereby who desires review thereof shall 
file a petition for review of the decision with supporting reasons. Such 
party shall transmit the petition in writing to the Administrative 
Review Board pursuant to 29 CFR part 8 if the proceeding was under the 
Service Contract Act, or to the Administrative Review Board pursuant to 
29 CFR part 7 if the proceeding was under Sec. 5.12(a)(1) of part 5 of 
this title or under section 3(a) of the Davis-Bacon Act, with a copy 
thereof to the Chief Administrative Law Judge. The petition for review 
shall refer to the specific findings of fact, conclusions of law, or 
order at issue.



Sec. 6.46  Ineligible list.

    Upon the final decision of the Administrative Law Judge, 
Administrative Review Board, as appropriate, the Administrator promptly 
shall forward to the Comptroller General the names of any firm, 
corporation, partnership, or association in which a person or firm 
debarred pursuant to section 5(a) of the Service Contract Act or 
Sec. 5.12(a) of part 5 of this title has a substantial interest; and/or 
the name of any firm, corporation, partnership, or association in which 
a person or firm debarred pursuant to section 3(a) of the Davis-Bacon 
Act has an interest.

[[Page 149]]



       Subpart E_Substantial Variance and Arm's Length Proceedings



Sec. 6.50  Scope.

    This subpart supplements the procedures contained in Secs. 4.10 and 
4.11 of part 4 of this title and states the rules of practice applicable 
to hearings under section 4(c) of the Act to determine whether the 
collectively bargained wages and/or fringe benefits otherwise required 
to be paid under that section and sections 2(a)(1) and (2) of the Act 
are substantially at variance with those which prevail for services of a 
character similar in the locality, and/or to determine whether the wages 
and/or fringe benefits provided in the collective bargaining agreement 
were reached as a result of arm's-length negotiations.



Sec. 6.51  Referral to Chief Administrative Law Judge.

    (a) Referral pursuant to Sec. 4.10 or Sec. 4.11 of part 4 of this 
title will be by an Order of Reference from the Administrator to the 
Chief Administrative Law Judge, to which will be attached the material 
submitted by the applicant or any other material the Administrator 
considers relevant and, for proceedings pursuant to Sec. 4.11 of this 
title, a copy of any findings of the Administrator. A copy of the Order 
of Reference and all attachments will be sent by mail to the following 
parties: The agency whose contract is involved, the parties to the 
collective bargaining agreement, any contractor or subcontractor 
performing on the contract, any contractor or subcontractor known to be 
desirous of bidding thereon or performing services thereunder who is 
known or believed to be interested in the determination of the issue, 
any unions or other authorized representatives of service employees 
employed or who may be expected to be employed by such contractor or 
subcontractor on the contract work, and any other affected parties known 
to be interested in the determination of the issue. The Order of 
Reference will have attached a certificate of service naming all 
interested parties who have been served.
    (b) Accompanying the Order of Reference and attachments will be a 
notice advising that any interested party, including the applicant, who 
intends to participate in the proceeding shall submit a written response 
to the Chief Administrative Law Judge within 20 days of the date on 
which the certificate of service indicates the Order of Reference was 
mailed. The notice will state that such a response shall include:
    (1) A statement of the interested party's case;
    (2) A list of witnesses the interested party will present, a summary 
of the testimony each is expected to give, and copies of all exhibits 
proposed to be proffered;
    (3) A list of persons who have knowledge of the facts for whom the 
interested party requests that subpoenas be issued and a brief statement 
of the purpose of their testimony; and
    (4) A certificate of service in accordance with Sec. 6.3 of this 
title on all interested parties, including the Administrator.



Sec. 6.52  Appointment of Administrative Law Judge and notification
of prehearing conference and hearing date.

    Upon receipt from the Administrator of an Order of Reference, notice 
to the parties, attachments and certificate of service, the Chief 
Administrative Law Judge shall appoint an Administrative Law Judge to 
hear the case. The Administrative Law Judge shall promptly notify all 
interested parties of the time and place of a prehearing conference and 
of the hearing which shall be held immediately upon the completion of 
prehearing conference. The date of the prehearing conference and hearing 
shall be not more than 60 days from the date on which the certificate of 
service indicates the Order of Reference was mailed.



Sec. 6.53  Prehearing conference.

    (a) At the prehearing conference the Administrative Law Judge shall 
attempt to determine the exact areas of agreement and disagreement 
raised by the Administrator's Order of Reference and replies thereto, so 
that the evidence and arguments presented at the hearing will be 
relevant, complete, and as brief and concise as possible.

[[Page 150]]

    (b) Any interested party desiring to file proposed findings of fact 
and conclusions of law shall submit them to the Administrative Law Judge 
at the prehearing conference.
    (c) If the parties agree that no hearing is necessary to supplement 
the written evidence and the views and arguments that have been 
presented, the Administrative Law Judge shall forthwith render his/her 
final decision. The Administrative Law Judge with the agreement of the 
parties may permit submission of additional written evidence or 
argument, such as data accompanied by affidavits attesting to its 
validity or depositions, within ten days of commencement of the 
prehearing conference.



Sec. 6.54  Hearing.

    (a) Except as provided in Sec. 6.53(c) of this title, the hearing 
shall commence immediately upon the close of the prehearing conference. 
All matters remaining in controversy, including the presentation of 
additional evidence, shall be considered at the hearing. There shall be 
a minimum of formality in the proceeding consistent with orderly 
procedure.
    (b) To expedite the proceeding the Administrative Law Judge shall, 
after consultation with the parties, set reasonable guidelines and 
limitations for the presentations to be made at the hearing. The 
Administrative Law Judge may limit cross-examination and may question 
witnesses.
    (c) Under no circumstances shall source data obtained by the Bureau 
of Labor Statistics, U.S. Department of Labor, or the names of 
establishments contacted by the Bureau be submitted into evidence or 
otherwise disclosed. Where the Bureau has conducted a survey, the 
published summary of the data may be submitted into evidence.
    (d) Affidavits or depositions may be admitted at the discretion of 
the Administrative Law Judge. The Administrative Law Judge may also 
require that unduly repetitious testimony be submitted as affidavits. 
Such affidavits shall be submitted within three days of the conclusions 
of the hearing.
    (e) Counsel for the Administrator shall participate in the 
proceeding to the degree he/she deems appropriate.
    (f) An expedited transcript shall be made of the hearing and of the 
prehearing conference.



Sec. 6.55  Closing of record.

    The Administrative Law Judge shall close the record promptly and not 
later than 10 days after the date of commencement of the prehearing 
conference. Post-hearing briefs may be permitted, but the filing of 
briefs shall not delay issuance of the decision of the Administrative 
Law Judge pursuant to Sec. 6.56 of this title.



Sec. 6.56  Decision of the Administrative Law Judge.

    Within 15 days of receipt of the transcript, the Administrative Law 
Judge shall render his/her decision containing findings of fact and 
conclusions of law. The decision of the Administrative Law Judge shall 
be based upon consideration of the whole record, and shall be in 
accordance with the regulations and rulings contained in part 4 and 
other pertinent parts of this title. If any party desires review of the 
decision, a petition for review thereof shall be filed as provided in 
Sec. 6.57 of this title, and such decision and order shall be 
inoperative unless and until the Administrative Review Board issues an 
order affirming the decision. If a petition has not been filed within 10 
days of issuance of the Administrative Law Judge's decision, the 
Administrator shall promptly issue any wage determination which may be 
required as a result of the decision.



Sec. 6.57  Petition for review.

    Within 10 days after the date of the decision of the Administrative 
Law Judge, any interested party who participated in the proceedings 
before the Administrative Law Judge and desires review of the decision 
shall file a petition for review by the Administrative Review Board 
pursuant to 29 CFR part 8. The petition shall refer to the specific 
findings of fact, conclusions of law, or order excepted to and the 
specific pages of transcript relevant to the petition for review.

[[Page 151]]



PART 7_PRACTICE BEFORE THE ADMINISTRATIVE REVIEW BOARD WITH REGARD
TO FEDERAL AND FEDERALLY ASSISTED CONSTRUCTION CONTRACTS
--Table of Contents



                       Subpart A_Purpose and Scope

Sec.
7.1  Purpose and scope.

                 Subpart B_Review of Wage Determinations

7.2  Who may file petitions for review.
7.3  Where to file.
7.4  When to file.
7.5  Contents of petitions.
7.6  Filing of wage determination record.
7.7  Presentations of other interested persons.
7.8  Disposition by the Administrative Review Board.

        Subpart C_Review of Other Proceedings and Related Matters

7.9  Review of decisions in other proceedings.

                Subpart D_Some General Procedural Matters

7.11  Right to counsel.
7.12  Intervention; other participation.
7.13  Consolidations.
7.14  Oral proceedings.
7.15  Public information.
7.16  Filing and service.
7.17  Variations in procedures.
7.18  Motions; extensions of time.

    Authority: Reorg. Plan No. 14 of 1950, 64 Stat. 1267; 5 U.S.C. 301, 
3 CFR, 1949-1953 Comp., p. 1007; sec. 2, 48 Stat. 948 as amended; 40 
U.S.C. 276c; secs. 104, 105, 76 Stat. 358, 359; 40 U.S.C. 330, 331; 65 
Stat. 290; 36 FR 306, 8755.

    Source: 36 FR 10863, June 4, 1971, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 7 appear at 61 FR 
19985, May 3, 1996.



                       Subpart A_Purpose and Scope



Sec. 7.1  Purpose and scope.

    (a) This part contains the rules of practice of the Administrative 
Review Board when it is exercising its jurisdiction described in 
paragraph (b) of this section.
    (b) The Board has jurisdiction to hear and decide in its discretion 
appeals concerning questions of law and fact from final decisions under 
parts 1, 3, and 5 of this subtitle including decisions as to the 
following: (1) Wage determinations issued under the Davis-Bacon Act and 
its related minimum wage statutes; (2) debarment cases arising under 
part 5 of this subtitle; (3) controversies concerning the payment of 
prevailing wage rates or proper classifications which involve 
significant sums of money, large groups of employees, or novel or 
unusual situations; and (4) recommendations of a Federal agency for 
appropriate adjustment of liquidated damages which are assessed under 
the Contract Work Hours and Safety Standards Act.
    (c) In exercising its discretion to hear and decide appeals, the 
Board shall consider, among other things, timeliness, the nature of the 
relief sought, matters of undue hardship or injustice, or the public 
interest.
    (d) In considering the matters within the scope of its jurisdiction 
the Board shall act as the authorized representative of the Secretary of 
Labor. The Board shall act as fully and finally as might the Secretary 
of Labor concerning such matters.
    (e) The Board is an essentially appellate agency. It will not hear 
matters de novo except upon a showing of extraordinary circumstances. It 
may remand under appropriate instructions any case for the taking of 
additional evidence and the making of new or modified findings by reason 
of the additional evidence.

[36 FR 10863, June 4, 1971, as amended at 61 FR 19985, May 3, 1996]



                Subpart B_Review of Wage Determinations.



Sec. 7.2  Who may file petitions for review.

    (a) Any interested person who is seeking a modification or other 
change in a wage determination under part 1 of this subtitle and who has 
requested the administrative officer authorized to make such 
modification or other change under part 1 and the request has been 
denied, after appropriate reconsideration shall have a right to petition 
for review of the action taken by that officer.

[[Page 152]]

    (b) For purpose of this section, the term interested person is 
considered to include, without limitation:
    (1) Any contractor, or an association representing a contractor, who 
is likely to seek or to work under a contract containing a particular 
wage determination, or any laborer or mechanic, or any labor 
organization which represents a laborer or mechanic, who is likely to be 
employed or to seek employment under a contract containing a particular 
wage determination, and
    (2) any Federal, State, or local agency concerned with the 
administration of a proposed contract or a contract containing a 
particular wage determination issued pursuant to the Davis-Bacon Act or 
any of its related statutes.



Sec. 7.3  Where to file.

    The petition (original and four copies) accompanied by a statement 
of service shall be filed with the Administrative Review Board, U.S. 
Department of Labor, Washington, DC 20210. In addition, copies of the 
petition shall be served upon each of the following: (a) The Federal, 
State, or local agency, or agencies involved; (b) the officer issuing 
the wage determination; and (c) any other person (or the authorized 
representatives of such persons) known, or reasonably expected, to be 
interested in the subject matter of the petition.



Sec. 7.4  When to file.

    (a) Requests for review of wage determinations must be timely made. 
Timeliness is dependent upon the pertinent facts and circumstances 
involved, including without limitation the contract schedule of the 
administering agency, the nature of the work involved, and its location.
    (b) The Board shall under no circumstances request any administering 
agency to postpone any contract action because of the filing of a 
petition. This is a matter which must be resolved directly with the 
administering agency by the petitioner or other interested person.



Sec. 7.5  Contents of petitions.

    (a) A petition for the review of a wage determination shall: (1) Be 
in writing and signed by the petitioner or his counsel (or other 
authorized representative); (2) be described as a petition for review by 
the Administrative Review Board; (3) identify clearly the wage 
determination, location of the project or projects in question, and the 
agency concerned; (4) state that the petitioner has requested 
reconsideration of the wage determination in question and describe 
briefly the action taken in response to the request; (5) contain a short 
and plain statement of the grounds for review; and (6) be accompanied by 
supporting data, views, or arguments.
    (b) A petition shall indicate whether or not the petitioner consents 
to the disposition of the questions involved by a single member of the 
Board.



Sec. 7.6  Filing of wage determination record.

    (a) In representing the officer issuing the wage determination the 
Solicitor shall, among other things, file promptly with the Board a 
record supporting his findings and conclusions, after receipt of service 
of the petition.
    (b) In representing the officer issuing the wage determination the 
Solicitor shall file with the Board a statement of the position of the 
officer issuing the wage determination concerning any findings 
challenged in the petition; and shall make service on the petitioner and 
any other interested persons.



Sec. 7.7  Presentations of other interested persons.

    Interested persons other than the petitioner shall have a reasonable 
opportunity as specified by the Board in particular cases to submit to 
the Board written data, views, or arguments relating to the petition. 
Such matter (original and four copies) should be filed with the 
Administrative Review Board, U.S. Department of Labor, Washington, DC 
20210. Copies of any such matter shall be served on the petitioner and 
other interested persons.



Sec. 7.8  Disposition by the Administrative Review Board.

    (a) The Board may decline review of any case whenever in its 
judgement a

[[Page 153]]

review would be inappropriate or because of lack of timeliness, the 
nature of the relief sought, or other reasons.
    (b) The Board shall decide the case upon the basis of all relevant 
matter contained in the entire record before it. The Board shall notify 
interested persons participating in the proceeding of its decision.
    (c) Decisions of the Board shall be by majority vote. A case will be 
reviewed upon the affirmative vote of one member.



        Subpart C_Review of Other Proceedings and Related Matters



Sec. 7.9  Review of decisions in other proceedings.

    (a) Any party or aggrieved person shall have a right to file a 
petition for review with the Board (original and four copies), within a 
reasonable time from any final decision in any agency action under part 
1, 3, or 5 of this subtitle.
    (b) The petition shall state concisely the points relied upon, and 
shall be accompanied by a statement setting forth supporting reasons. 
Further, the petition shall indicate whether or not the petitioner 
consents to the disposition of the questions involved by a single 
member.
    (c) A copy of the presentation shall be served upon the officer who 
issued the decision, and upon any other party or known interested 
person, as the case may be. In representing the officer who issued the 
final decision in any agency action under parts 1, 3, or 5 of the 
subtitle, the Solicitor shall, among other things, file promptly with 
the Board a record supporting the officer's decision, including any 
findings upon which the decision is based, after receipt of service of 
the petition.
    (d) In representing the officer issuing a final decision in any 
agency action under parts 1, 3, and 5 of this subtitle, the Solicitor 
shall file with the Board a statement of the position of the officer who 
issued the final decision at issue, concerning the decision challenged; 
and shall make service on the petitioner and any other interested 
persons.
    (e) The Board shall afford any other parties or known interested 
persons a reasonable opportunity to respond to the petition. Copies of 
any such response shall be served upon the officer issuing the decision 
below and upon the petitioner.
    (f) The Board shall pass upon the points raised in the petition upon 
the basis of the entire record before it, and shall notify the parties 
to the proceeding of its decision. In any remand of a case as provided 
in Sec. 7.1(e), the Board shall include any appropriate instructions.



                Subpart D_Some General Procedural Matters



Sec. 7.11  Right to counsel.

    Each interested person or party shall have the right to appear in 
person or by or with counsel or other qualified representative in any 
proceeding before the Board.



Sec. 7.12  Intervention; other participation.

    For good cause shown, the Board may permit any interested person or 
party to intervene or otherwise participate in any proceeding held by 
the Board. Except when requested orally before the Board, a petition to 
intervene or otherwise participate shall be in writing (original and 
four copies) and shall state with precision and particularity: (a) The 
petitioner's relationship to the matters involved in the proceedings, 
and (b) the nature of the presentation which he would make. Copies of 
the petition shall be served to all parties or interested persons known 
to participate in the proceeding, who may respond to the petition. 
Appropriate service shall be made of any response.



Sec. 7.13  Consolidations.

    Upon its own initiative or upon motion of any interested person or 
party, the Board may consolidate in any proceeding or concurrently 
consider two or more appeals which involve substantially the same 
persons or parties, or issues which are the same or closely related, if 
it finds that such consolidation or concurrent review will contribute to 
a proper dispatch of its business and to the ends of justice, and it

[[Page 154]]

will not unduly delay consideration of any such appeals.



Sec. 7.14  Oral proceedings.

    (a) With respect to any proceeding before it, the Board may upon its 
own initiative or upon request of any interested person or party direct 
the interested persons or parties to appear before the Board or its 
designee at a specified time and place in order to simplify the issues 
presented or to take up any other matters which may tend to expedite or 
facilitate the disposition of the proceeding.
    (b) In its discretion, the Board, or a single presiding member, may 
permit oral argument in any proceeding. The Board or the presiding 
member, shall prescribe the time and place for argument and the time 
allotted for argument. A petitioner wishing to make oral argument should 
make the request therefor in his petition.



Sec. 7.15  Public information.

    (a) Subject to the provisions of Secs. 1.15, 5.6, and part 70 of 
this subtitle, all papers and documents made a part of the official 
record in the proceedings of the Board and decisions of the Board shall 
be made available for public inspection during usual business hours at 
the office of the Administrative Review Board, U.S. Department of Labor, 
Washington, DC 20210.
    (b) Facsimile copies of such papers, documents and decisions shall 
be furnished upon request. There shall be a charge of 25 cents for each 
facsimile page reproduction except for copies of materials duplicated 
for distribution for no charge as provided in paragraph (c) of this 
section. Postal fees in excess of domestic first class postal rates as 
are necessary for transmittal of copies will be added to the per-page 
fee specified unless stamps or stamped envelopes are furnished with the 
request.
    (c) No charge need to be made for furnishing:
    (1) Unauthenticated copies of any rules, regulations, or decisions 
of general import,
    (2) Copies to agencies which will aid in the administration of the 
Davis-Bacon and related acts,
    (3) Copies to contractor associations and labor organizations for 
general dissemination of the information contained therein, and
    (4) Only occasionally unauthenticated copies of papers and 
documents.



Sec. 7.16  Filing and service.

    (a) Filing. All papers submitted to the Board under this part shall 
be filed with the Executive Director of the Administrative Review Board, 
U.S. Department of Labor, Washington, DC 20210.
    (b) Number of copies. An original and four copies of all papers 
shall be submitted.
    (c) Manner of service. Service under this part shall be by the 
filing party or interested person, service may be personal or may be by 
mail. Service by mail is complete on mailing.
    (d) Proof of service. Papers filed with the Board shall contain an 
acknowledgement of service by the person served or proof of service in 
the form of a statement of the date and the manner of service and the 
names of the person or persons served, certified by the person who made 
service.



Sec. 7.17  Variations in procedures.

    Upon reasonable notice to the parties or interested persons, the 
Board may vary the procedures specified in this part in particular 
cases.



Sec. 7.18  Motions; extensions of time.

    (a) Except as otherwise provided in this part, any application for 
an order or other relief shall be made by motion for such order or 
relief. Except when made orally before the Board, motions shall be in 
writing and shall be accompanied by proof of service on all other 
parties or interested persons. If a motion is supported by briefs, 
affidavits, or other papers, they shall be served and filed with the 
motion. Any party or interested person, as the case may be, may respond 
to the motion within such time as may be provided by the Board.
    (b) Requests for extensions of time in any proceeding as to the 
filing of papers or oral presentations shall be in the form of a motion 
under paragraph (a) of this section.

[[Page 155]]



PART 8_PRACTICE BEFORE THE ADMINISTRATIVE REVIEW BOARD WITH REGARD TO
FEDERAL SERVICE CONTRACTS--Table of Contents



                       Subpart A_Purpose and Scope

Sec.
8.1  Purpose and scope.

                 Subpart B_Review of Wage Determinations

8.2  Who may file petitions of review.
8.3  When to file.
8.4  Contents of petition.
8.5  Filing of wage determination record.
8.6  Disposition by the Administrative Review Board.

        Subpart C_Review of Other Proceedings and Related Matters

8.7  Review of decisions in other proceedings.
8.8  Filing of administrative record.
8.9  Disposition by the Administrative Review Board.

                  Subpart D_General Procedural Matters

8.10  Filing and service.
8.11  Presentations of other interested persons.
8.12  Intervention; other participation.
8.13  Right to counsel.
8.14  Consolidations.
8.15  Motions; extensions of time.
8.16  Oral proceedings.
8.17  Decision of the Board.
8.18  Public information.
8.19  Equal Access to Justice Act.

    Authority: Secs. 4 and 5, 79 Stat. 1034, 1035, as amended by 86 
Stat. 789, 790, 41 U.S.C. 353, 354; 5 U.S.C. 301; Reorg. Plan No. 14 of 
1950, 64 Stat. 1267, 5 U.S.C. Appendix; 76 Stat. 357-359, 40 U.S.C. 327-
332.

    Source: 49 FR 10637, Mar. 21, 1984, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 8 appear at 61 FR 
19985, May 3, 1996.



                       Subpart A_Purpose and Scope



Sec. 8.1  Purpose and scope.

    (a) This part contains the rules of practice of the Administrative 
Review Board when it is exercising its jurisdiction described in 
paragraph (b) of this section.
    (b) The Board has jurisdiction to hear and decide in its discretion 
appeals concerning questions of law and fact from final decisions of the 
Administrator of the Wage and Hour Division or authorized 
representative, and from decisions of Administrative Law Judges under 
subparts B, D, and E of part 6 of this title, arising under the Service 
Contract Act and the Contract Work Hours and Safety Standards Act where 
the contract is also subject to the Service Contract Act. The Board 
shall not have jurisdiction to pass on the validity of any portion of 
the Code of Federal Regulations which has been duly promulgated through 
notice and comment by the Department of Labor and shall observe the 
provisions thereof, where pertinent, in its decisions. The jurisdiction 
of the Board includes:
    (1) Wage determinations issued under the Service Contract Act;
    (2) Substantial variance proceedings or arm's-length negotiations 
proceedings pursuant to section 4(c) of the Service Contract Act;
    (3) Debarment or other enforcement proceedings;
    (4) Proceedings to determine substantial interest of debarred 
persons or firms;
    (5) Decisions of the Wage-Hour Administrator or authorized 
representative regarding recommendations of a Federal agency for 
adjustment or waiver of liquidated damages assessed under the Contract 
Work Hours and Safety Standards Act;
    (6) Other final actions of the Wage-Hour Administrator or authorized 
representative (e.g., additional classification actions and rulings with 
respect to application of the Act(s), or the regulations, or of wage 
determinations issued thereunder).
    (7) Other matters specifically referred to the Board by the 
Secretary of Labor.
    (c) In considering the matters within the scope of its jurisdiction 
the Board shall act as the authorized representative of the Secretary of 
Labor and shall act as fully and finally as might the Secretary of Labor 
concerning such matters.
    (d) The Board is an appellate body and shall decide cases properly 
brought before it on the basis of all relevant matter contained in the 
entire record before it. Decisions by the Board shall be based upon the 
preponderance of the

[[Page 156]]

evidence before it. It may remand with appropriate instructions any case 
for the taking of additional evidence and the making of new or modified 
findings by reason of the additional evidence. However, unless the 
petition for review cities alleged procedural irregularities in the 
proceeding below and not the merits of a case, the Board shall not 
consider a petition for review filed by any party against whom default 
judgment has been entered pursuant to the provisions of part 6 of this 
title.

[49 FR 10637, Mar. 21, 1984, as amended at 61 FR 19985, May 3, 1996]



                 Subpart B_Review of Wage Determinations



Sec. 8.2  Who may file petitions of review.

    (a) Any interested party who is seeking a modification of other 
change in a wage determination under the Service Contract Act and who 
has requested the Wage-Hour Administrator or authorized representative 
to make such modification or other change under Sec. 4.55 of part 4 of 
this title, and the request has been denied, shall have a right to 
petition of review of the action taken by that officer.
    (b) For purposes of this subpart, the term interested party shall 
mean:
    (1) Any employee or any labor organization which represents an 
employee who is likely to be employed or to seek employment under a 
contract containing a particular wage determination, or any contractor 
or an association representing a contractor who is likely to seek a 
contract or to work under a contract containing a particular wage 
determination;
    (2) The Federal agency(s) which will administer a proposed contract 
containing a particular wage determination issued pursuant to the 
Service Contract Act; and
    (3) Any other party whom the Board finds to have a sufficient 
interest in the wage determination.



Sec. 8.3  When to file.

    (a) Requests for review of wage determinations must be filed within 
20 days of issuance of the Wage-Hour Administrator's decision denying a 
request to make a change in the wage determination.
    (b) The Board shall under no circumstances request any administering 
agency to postpone any contract action because of the filing of a 
petition.



Sec. 8.4  Contents of petition.

    (a) A petition for review of a wage determination shall:
    (1) Be in writing and signed by the petitioner or his/her counsel 
(or other authorized representative);
    (2) Be addressed to the Administrative Review Board;
    (3) Identify clearly the wage determination, location where the 
contract will be performed, if known, and the agency concerned;
    (4) State that the petitioner has requested reconsideration of the 
wage determination in question pursuant to 29 CFR 4.55 and describe 
briefly the action taken in response to the request;
    (5) Contain a short and plain statement of the grounds for review;
    (6) Be accompanied by supporting data, views, or arguments; and
    (7) Contain a statement that all data or other evidence submitted 
have previously been submitted to the Administrator.
    (b) A petition shall indicate whether or not the petitioner consents 
to the disposition of the questions involved by a single member of the 
Board.



Sec. 8.5  Filing of wage determination record.

    The Associate Solicitor for Fair Labor Standards shall, promptly 
after service of the petition, file with the Board the record upon which 
the wage determination was based. Under no circumstances shall source 
data obtained by the Bureau of Labor Statistics, U.S. Department of 
Labor, or the names of establishments contacted by the Bureau be filed 
with the Board or otherwise disclosed. Where the Bureau has conducted a 
survey, the published summary of the data may be filed.



Sec. 8.6  Disposition by the Administrative Review Board.

    (a) The Board may decline review of any case whenever in its 
judgment review would be inappropriate because of

[[Page 157]]

lack of timeliness, the nature of the relief sought, the case involves 
only settled issues of law, the appeal is frivolous on its face, or 
other reasons. A case will be reviewed upon the affirmative vote of one 
member.
    (b) Except as provided in paragraphs (c) and (d) of this section, 
the Board will not review a wage determination after award, exercise of 
option, or extension of a contract, unless such procurement action was 
taken without the wage determination required pursuant to Secs. 4.4 and 
4.5 of part 4 of this title.
    (c) A wage determination may be reviewed after award, exercise of 
option, or extension of a contract if it is issued after a finding by an 
Administrative Law Judge or the Board that a substantial variance exists 
between collectively bargained wage rates and/or fringe benefits 
otherwise required to be paid pursuant to section 4(c) of the Act and 
those prevailing for services of a character similar in the locality, or 
after a finding that such collective bargaining agreement was not 
reached as a result of arm's length negotiations.
    (d) Where a petition for review of a wage determination is filed 
prior to award, exercise of option, or extension of a contract, the 
Board may review the wage determination after such award, exercise of 
option, or extension of a contract if the issue is a significant issue 
of general applicability. The Board's decision shall not affect the 
contract after such award, exercise of option, or extension.
    (e) In issuing its decision the Board will act expeditiously, taking 
into consideration procurement deadlines. The Board shall decide the 
case upon the basis of all relevant matters contained in the entire 
record before it and shall not consider any data not submitted to the 
Wage-Hour Administrator with the request for reconsideration. The Board 
in its decision affirming, modifying, or setting aside the wage 
determination, shall include a statement of reasons or bases for the 
actions taken. In any remand of a case as provided in Sec. 8.1(d) of 
this title, the Board shall include appropriate instructions.



        Subpart C_Review of Other Proceedings and Related Matters



Sec. 8.7  Review of decisions in other proceedings.

    (a) A petition for review of a decision of an Administrative Law 
Judge pursuant to subparts B, D or E of part 6 of this title may be 
filed by any aggrieved party in accordance with the provisions therein.
    (b) A petition for review of a final written decision (other than a 
wage determination) of the Administrator or authorized representative 
may be filed by any aggrieved party within 60 days of the date of the 
decision of which review is sought. Where a case has been referred 
directly to the Board pursuant to Sec. 4.11 or Sec. 4.12 of this title, 
no petition for review shall be necessary; a brief in support of the 
aggrieved party's position shall be filed within 30 days of filing of 
the administrative record by the Administrator.
    (c) A petition shall state concisely the points relied upon, and 
shall be accompanied by a statement setting forth supporting reasons. 
The petition shall also indicate whether or not the petitioner consents 
to the disposition of the questions involved by a single member.



Sec. 8.8  Filing of administrative record.

    (a) If a petition for review has been filed concerning a decision 
pursuant to part 6 of this title, the Chief Administrative Law Judge 
shall promptly forward the record of the proceeding before the 
Administrative Law Judge to the Board.
    (b) If a petition for review has been filed concerning a final 
decision of the Wage-Hour Administrator or authorized representative, 
the Associate Solicitor for Fair Labor Standards shall promptly file 
with the Board a record upon which the decision was based.



Sec. 8.9  Disposition by the Administrative Review Board.

    (a) The Board may decline review of any case whenever in its 
judgment review would be inappropriate because of lack of timeliness, 
the nature of the relief sought, the case involves only settled issues 
of law, the appeal is frivolous on its face, or other reasons. A

[[Page 158]]

case will be reviewed upon the affirmative vote of one member.
    (b) In issuing its decision the Board will take into consideration 
procurement deadlines where appropriate. The Board shall pass upon the 
points raised in the petition upon the basis of the entire record before 
it. The Board may affirm, modify or set aside, in whole or in part, the 
decision under review and shall issue a decision including a statement 
of reasons or bases for the actions taken. The Board shall modify or set 
aside findings of fact only when it determines that those findings are 
not supported by a preponderance of the evidence. In any remand of a 
case as provided in Sec. 8.1(e) of this title, the Board shall include 
any appropriate instructions.



                  Subpart D_General Procedural Matters



Sec. 8.10  Filing and service.

    (a) Filing. All papers submitted to the Board under this part shall 
be filed with the Executive Director of the Administrative Review Board, 
U.S. Department of Labor, Washington, DC 20210.
    (b) Number of copies. An original and four copies of all papers 
shall be submitted.
    (c) Manner of service. Service under this part shall be personal or 
by mail. Service by mail is complete on mailing. For purposes of this 
part, filing is accomplished upon the day of service, by mail or 
otherwise.
    (d) Proof of service. Papers filed with the Board shall contain an 
acknowledgement of service by the person served or proof of service in 
the form of a statement of the date and the manner of service and the 
names of the person or persons served, certified by the person who made 
service.
    (e) Service upon the Department of Labor and other interested 
parties. A copy of all documents filed with the Board shall be served 
upon the Associate Solicitor, Division of Fair Labor Standards, U.S. 
Department of Labor, Washington, DC 20210; the Administrator, Wage and 
Hour Division, U.S. Department of Labor, Washington, DC 20210; the 
Federal contracting agency involved; and all other interested parties.



Sec. 8.11  Presentations of other interested persons.

    (a) Where a petition has been filed for review of a wage 
determination or other final decision of the Administrator or authorized 
representative, the Board shall notify the parties known or believed to 
be interested in the case. The Associate Solicitor and any other parties 
interested in presenting their views shall file a statement within 30 
days of the filing of the petition (or such other time as is specified 
by the Board, with consideration of procurement deadlines, as 
appropriate).
    (b) Where a petition has been filed for review of a decision issued 
pursuant to subparts B, D or E of part 6 of this title, any other 
parties to the proceeding interested in presenting their views shall 
file a statement within 30 days of the filing of the petition (or such 
other time as is specified by the Board, with consideration of 
procurement deadlines, as appropriate).



Sec. 8.12  Intervention; other participation.

    For good cause shown, the Board may permit any interested party to 
intervene or otherwise participate in any proceeding held by the Board. 
Except when requested orally before the Board, a petition to intervene 
or otherwise participate shall be in writing (original and four copies) 
and shall state with precision and particularity:
    (a) The petitioner's relationship to the matters involved in the 
proceedings, and
    (b) The nature of the presentation which the peititioner would make.



Sec. 8.13  Right to counsel.

    Each interested party shall have the right to appear in person or by 
counsel or other representative in any proceeding before the Board.



Sec. 8.14  Consolidations.

    Upon its own initative or upon motion of any interested party, the 
Board may consolidate any proceeding or concurrently consider two or 
more appeals which involve substantially the same

[[Page 159]]

parties, or issues which are the same or closely related, if it finds 
that such consolidation or concurrent review will contribute to a proper 
dispatch of its business and to the ends of justice, and it will not 
unduly delay consideration of any such appeals.



Sec. 8.15  Motions; extensions of time.

    (a) Except as otherwise provided in this part, any application for 
an order or other relief shall be made by motion. Except when made 
orally before the Board, motions shall be in writing and shall be 
accompanied by proof of service on all other parties. If a motion is 
supported by briefs, affidavits, or other papers, they shall be served 
and filed with the motion. Any party may respond to the motion within 
such time as may be provided by the Board.
    (b) Requests for extension of time as to the filing of papers or 
oral presentation shall be in the form of a motion under paragraph (a) 
of this section.



Sec. 8.16  Oral proceedings.

    (a) With respect to any proceedings before it, the Board may upon 
its own initative or upon request of any interested party direct the 
interested parties to appear before the Board or its designee at a 
specified time and place in order to simplify the issues persented or to 
take up any other matters which may tend to expedite or facilitate the 
disposition of the proceeding.
    (b) In its discretion, the Board or a single presiding member may 
permit oral argument in any proceeding. The Board or the presiding 
member shall prescribe the time and place for argument and the time 
allocated for argument. A petitioner wishing to make oral argument 
should make the request therefore in the petition.



Sec. 8.17  Decision of the Board.

    (a) Unless the petitioner consents to disposition by a single 
member, decisions of the Board shall be by majority vote.
    (b) Where petitioner consents to disposition by a single member, 
other interested parties shall have an opportunity to oppose such 
disposition, and such opposition shall be taken into consideration by 
the Board in determining whether the decision shall be by a single 
member or majority vote.



Sec. 8.18  Public information.

    Subject to the provisions of part 70 of this title, all papers and 
documents made a part of the official record in the proceedings of the 
Board and decisions of the Board shall be made available for public 
inspection during usual business hours at the Office of the 
Administrative Review Board, U.S. Department of Labor, Washington, DC 
20210.



Sec. 8.19  Equal Access to Justice Act.

    Proceedings under the Service Contract Act and the Contract Work 
Hours and Safety Standards Act are not subject to the Equal Access to 
Justice Act (Pub. L. 96-481). Accordingly, in any proceeding conducted 
pursuant to the provisions of this part 8, the Board shall have no power 
or authority to award attorney fees and/or other litigation expenses 
pursuant to the Equal Access to Justice Act.



PART 9_NONDISPLACEMENT OF QUALIFIED WORKERS UNDER SERVICE CONTRACTS
--Table of Contents



                            Subpart A_General

Sec.
9.1  Purpose and scope.
9.2  Definitions.
9.3  Coverage.
9.4  Exclusions.

                         Subpart B_Requirements

9.11  Contracting agency requirements.
9.12  Contractor requirements and prerogatives.

                          Subpart C_Enforcement

9.21  Complaints.
9.22  Wage and Hour Division conciliation.
9.23  Wage and Hour Division investigation.
9.24  Remedies and sanctions for violations of this part.

 Subpart D_Administrator's Determination, Mediation, and Administrative 
                               Proceedings

9.31  Administrator's determination.
9.32  Requesting appeals.
9.33  Mediation.
9.34  Administrative Law Judge hearings.
9.35  Administrative Review Board proceedings.

Appendix A to Part 9--Contract Clause

[[Page 160]]

Appendix B to Part 9--Notice to Service Contract Employees.

    Authority: 5 U.S.C. 301; section 6, E.O. 13495, 74 FR 6103; 
Secretary's Order 9-2009, 74 FR 58836.

    Source: 76 FR 53752, Aug. 29, 2011, unless otherwise noted.



                            Subpart A_General



Sec. 9.1  Purpose and scope.

    (a) Purpose. This part contains the Department of Labor's rules 
relating to the administration of Executive Order 13495, 
``Nondisplacement of Qualified Workers Under Service Contracts,'' and 
implements the enforcement provisions of the Executive Order. The 
Executive Order assigns enforcement responsibility for the 
nondisplacement requirements to the Department. The Executive Order 
states that the Federal Government's procurement interests in economy 
and efficiency are served when the successor contractor hires the 
predecessor's employees. A carryover workforce minimizes disruption in 
the delivery of services during a period of transition between 
contractors and provides the Federal Government the benefit of an 
experienced and trained workforce that is familiar with the Federal 
Government's personnel, facilities, and requirements. Executive Order 
13495, therefore, generally requires that successor service contractors 
performing on Federal contracts offer a right of first refusal to 
suitable employment (i.e., a job for which the employee is qualified) 
under the contract to those employees under the predecessor contract 
whose employment will be terminated as a result of the award of the 
successor contract.
    (b) Policy. Executive Order 13495 establishes a Federal Government 
policy for service contracts and their solicitations to include a clause 
that requires the contractor and its subcontractors under a contract 
that succeeds a contract for performance of the same or similar services 
at the same location to offer a right of first refusal of employment to 
those employees (other than managerial and supervisory employees) 
employed under the predecessor contract whose employment will be 
terminated as a result of the award of the successor contract in 
positions for which the employees are qualified. Nothing in Executive 
Order 13495 or this part shall be construed to permit a contractor or 
subcontractor to fail to comply with any provision of any other 
Executive Order, regulation, or law of the United States.
    (c) Scope. Neither Executive Order 13495 nor this part creates any 
rights under the Contract Disputes Act or any private right of action. 
The Executive Order provides that disputes regarding the requirement of 
the contract clause prescribed by section 5 of the Order, to the extent 
permitted by law, shall be disposed of only as provided by the Secretary 
of Labor in regulations issued under the Order. It also provides for 
this part to favor the resolution of disputes by efficient and informal 
alternative dispute resolution methods to the extent practicable. The 
Order does not preclude judicial review of final decisions by the 
Secretary in accordance with the Administrative Procedure Act. 
Additionally, the Order also provides that it is to be implemented 
consistent with applicable law and subject to the availability of 
appropriations.



Sec. 9.2  Definitions.

    For purposes of this part:
    Administrator means the Administrator of the Wage and Hour Division 
and includes any official of the Wage and Hour Division authorized to 
perform any of the functions of the Administrator under this part.
    Administrative Review Board means the Administrative Review Board, 
U.S. Department of Labor.
    Contractor means a prime contractor and all of its first or lower 
tier subcontractors on a Federal service contract.
    Contracting Officer means the individual, a duly appointed 
successor, or authorized representative who is designated and authorized 
to enter into procurement contracts on behalf of the Federal contracting 
agency.
    Day means, unless otherwise specified, a calendar day.
    Employee or service employee means any person engaged in the 
performance of a service contract other than any person employed in a 
bona fide executive, administrative, or professional capacity, as those 
terms are defined in

[[Page 161]]

29 CFR part 541. The term employee or service employee includes all such 
persons, as defined in the McNamara-O'Hara Service Contract Act of 1965, 
as amended, regardless of any contractual relationship that may be 
alleged to exist between a contractor or subcontractor and such persons.
    Employment opening means any vacancy in a position on the contract, 
including any vacancy caused by replacing an employee from the 
predecessor contract with a different employee.
    Federal Government means an agency or instrumentality of the United 
States that enters into a procurement contract pursuant to authority 
derived from the Constitution and the laws of the United States.
    Managerial employee and supervisory employee mean a person engaged 
in the performance of services under the contract who is employed in a 
bona fide executive, administrative, or professional capacity, as those 
terms are defined and delimited in 29 CFR part 541.
    Month means a period of 30 consecutive days, regardless of the day 
of the calendar month on which it begins.
    Office of Administrative Law Judges means the Office of 
Administrative Law Judges, U.S. Department of Labor.
    Secretary means the U.S. Secretary of Labor or an authorized 
representative of the Secretary.
    Same or similar service means a service that is either identical to 
or has one or more characteristics that are alike in substance to a 
service performed at the same location on a contract that is being 
replaced by the Federal Government or a contractor on a Federal service 
contract.
    Service contract or contract means any contract or subcontract for 
services entered into by the Federal Government or its contractors that 
is covered by the McNamara-O'Hara Service Contract Act of 1965, as 
amended, and its implementing regulations.
    Solicitation means any request to submit offers or quotations to the 
Government.
    United States means the United States and all executive departments, 
independent establishments, administrative agencies, and 
instrumentalities of the United States, including corporations of which 
all or substantially all of the stock is owned by the United States, by 
the foregoing departments, establishments, agencies, instrumentalities, 
and including non-appropriated fund instrumentalities.
    Wage and Hour Division means the Wage and Hour Division, U.S. 
Department of Labor.



Sec. 9.3  Coverage.

    This part applies to all service contracts and their solicitations, 
except those excluded by Sec. 9.4 of this part, that succeed contracts 
for the same or similar service at the same location.



Sec. 9.4  Exclusions.

    (a) Small contracts. (1) General. The requirements of this part do 
not apply to contracts or subcontracts under the simplified acquisition 
threshold set by the Office of Federal Procurement Policy Act, as 
amended.
    (2) Application to subcontracts. While the Sec. 9.4(a)(1) exclusion 
applies to subcontracts that are less than the simplified acquisition 
threshold, the prime contractor must comply with the requirements of 
this part, if the prime contract is at least the threshold amount. When 
a contractor that is subject to the nondisplacement requirements of this 
part discontinues the services of a subcontractor at any time during the 
contract and performs those services itself at the same location, the 
contractor shall offer employment on the contract to the subcontractor's 
employees who would otherwise be displaced and would otherwise be 
qualified in accordance with this part but for the size of the 
subcontract.
    (b) Certain contracts or subcontracts awarded for services produced 
or provided by persons who are blind or have severe disabilities. (1) 
The requirements of this part do not apply to contracts or subcontracts 
pursuant to the Javits-Wagner-O'Day Act.
    (2) The requirements of this part do not apply to contracts or 
subcontracts for guard, elevator operator, messenger, or custodial 
services provided to the Federal Government under contracts or 
subcontracts with sheltered workshops employing the severely handicapped 
as described in sec. 505 of

[[Page 162]]

the Treasury, Postal Services and General Government Appropriations Act, 
1995.
    (3) The requirements of this part do not apply to agreements for 
vending facilities entered into pursuant to the preference regulations 
issued under the Randolph-Sheppard Act.
    (4) The exclusions provided by paragraphs (b)(1) through (3) of this 
section apply when either the predecessor or successor contract has been 
awarded for services produced or provided by the severely disabled, as 
described in paragraphs (b)(1)-(3) of this section.
    (c) Federal service work constituting only part of employee's job. 
This part does not apply to employees who were hired to work under a 
Federal service contract and one or more nonfederal service contracts as 
part of a single job, provided that the employees were not deployed in a 
manner that was designed to avoid the purposes of Executive Order 13495.
    (d) Contracts exempted by Federal agency. This part does not apply 
to any contract, subcontract, or purchase order or any class of 
contracts, subcontracts, or purchase orders as to which the head of a 
contracting department or agency finds that the application of any of 
the requirements of this part would not serve the purposes of Executive 
Order 13495 or would impair the ability of the Federal Government to 
procure services on an economical and efficient basis.
    (1) Any agency determination to exercise its exemption authority 
under Section 4 of the Executive Order shall be made no later than the 
solicitation date. As an alternative to exempting the agency from all 
provisions of this part, the head of a contracting department or agency 
may exempt the agency from one or more individual provisions no later 
than the contract solicitation date. Any agency determination to 
exercise its exemption authority under Section 4 of the Executive Order 
made after the solicitation date shall be inoperative and in such a 
circumstance the contract clause set forth in Appendix A of this part 
shall be included in, or added to, the covered service contracts and 
their solicitations.
    (2) When an agency exercises its exemption authority with respect to 
any contract, subcontract, or purchase order, the contracting agency 
shall ensure that the contractor notifies affected workers and their 
collective bargaining representatives in writing of the agency's 
determination no later than five business days after the solicitation 
date. The notification shall include facts supporting the determination 
that the application of one or more requirements of this part would not 
serve the purposes of Executive Order 13495 or would impair the ability 
of the Federal Government to procure services on an economical and 
efficient basis. Where a contracting agency exempts a class of 
contracts, subcontracts, or purchase orders, the contractor shall 
provide the notice to incumbent workers and their collective bargaining 
representatives for each individual solicitation. A contracting agency's 
failure to ensure that the contractor notifies incumbent workers and 
their collective bargaining representatives in writing of the agency's 
determination to exercise its exemption authority under Section 4 of the 
Executive Order no later than five business days after the solicitation 
date shall render the exemption decision inoperative and in such a 
circumstance the contract clause set forth in Appendix A of this part 
shall be included in, or added to, the covered service contracts and 
their solicitations. The contracting agency also shall notify the 
Department of its exemption decision and provide the Department with a 
copy of its written analysis no later than five business days after the 
solicitation date, which the Department will post on its Web site at 
http://www.dol.gov. The contracting agency's failure to follow this 
requirement shall render any agency exemption decision inoperative and 
in such a circumstance the clause in Appendix A of this part shall be 
included in, or added to, the covered service contracts and their 
solicitations.
    (3) The agency shall ensure that the predecessor contractor uses the 
notification method specified in Sec. 9.11(b) of this part to inform 
workers and their collective bargaining representatives of the exemption 
determination. The

[[Page 163]]

failure by a contracting agency to ensure that the contractor uses the 
notification method specified in Sec. 9.11(b) of this part shall render 
the exemption decision inoperative and in such a circumstance the 
contract clause set forth in Appendix A of this part shall be included 
in, or added to, the covered service contracts and their solicitations.
    (4)(i) In exercising the authority to exempt contracts under this 
section based on a finding that any of the requirements of Executive 
Order 13495 would not serve the purposes of the Order, or would impair 
the ability of the Federal Government to procure services on an 
economical and efficient basis, the agency shall prepare a written 
analysis by the solicitation date supporting such determination. The 
written analysis shall be retained in accordance with FAR 4.805. 48 CFR 
4.805. Such a written analysis shall, among other things, compare the 
anticipated outcomes of hiring predecessor contract employees with those 
of hiring a new workforce. The consideration of cost and other factors 
in exercising the agency's exemption authority shall reflect the general 
finding made by the Executive Order that the government's procurement 
interests in economy and efficiency are normally served when the 
successor contractor hires the predecessor's employees, and shall 
specify how the particular circumstances support a contrary conclusion. 
Any agency determination to exercise its exemption authority under 
Section 4 of the Executive Order without a written analysis as required 
by this part shall be inoperative and in such a circumstance the 
contract clause set forth in Appendix A of this part shall be included 
in, or added to, the covered service contracts and their solicitations.
    (ii) When analyzing whether the application of the Executive Order's 
requirements would not serve the purposes of the Order and impair the 
ability of the Federal Government to procure services on an economical 
and efficient basis, the head of a contracting department or agency 
shall consider the specific circumstances associated with the services 
to be acquired. General assertions or presumptions of an inability to 
procure services on an economical and efficient basis using a carryover 
workforce shall be deemed insufficient. Factors that may be considered 
include, but are not limited to the following:
    (A) Whether the use of a carryover workforce would greatly increase 
disruption to the delivery of services during the period of transition 
between contracts (e.g., the carryover workforce in its entirety would 
not be an experienced and trained workforce that is familiar with the 
Federal Government's personnel, facilities, and requirements as 
pertinent to the contract, subcontract, purchase order, class of 
contracts, subcontracts, or purchase orders at issue and would require 
extensive training to learn new technology or processes that would not 
be required of a new workforce).
    (B) Emergency situations, such as a natural disaster or an act of 
war, that physically displace incumbent employees from the location of 
the service contract work and make it impossible or impracticable to 
extend offers to hire as required by the Order.
    (C) Situations where the head of the contracting department or 
agency reasonably believes, based on the predecessor employees' past 
performance, that the entire predecessor workforce failed, individually 
as well as collectively, to perform suitably on the job and that it is 
not in the interest of economy and efficiency to provide supplemental 
training to the predecessor's workers.
    (iii) Factors the head of a contracting department or agency shall 
not consider in making an exemption determination (because consideration 
of such factors would contravene the Executive Order's purposes and 
findings) include whether the use of a carryover workforce, in general, 
would greatly increase disruption to the delivery of services during the 
period of transition between contracts; whether, in general, a carryover 
workforce would not be an experienced and trained workforce that is 
familiar with the Federal Government's personnel, facilities, and 
requirements; the job performance of the predecessor contractor; the 
seniority of the workforce; and the reconfiguration of the contract

[[Page 164]]

work by a successor contractor. The head of a contracting department or 
agency also shall not consider wage rates and fringe benefits of service 
employees in making an exemption determination except in the following 
exceptional circumstances:
    (A) In emergency situations, such as a natural disaster or an act of 
war, that physically displace incumbent employees from the locations of 
the service contract work and make it impossible or impracticable to 
extend offers to hire as required by the Order;
    (B) When a carryover workforce in its entirety would not constitute 
an experienced and trained workforce that is familiar with the Federal 
Government's personnel, facilities, and requirements but rather would 
require extensive training to learn new technology or processes that 
would not be required of a new workforce; or
    (C) Other, similar circumstances in which the cost of employing a 
carryover workforce on the successor contract would be prohibitive.
    (5) Any request by interested parties for reconsideration of a 
contracting department or agency head's determination to exercise its 
exemption authority under Section 4 of the Executive Order shall be 
directed to the head of the contracting department or agency.
    (e) Managerial and supervisory employees. This part does not apply 
to employees who are managerial or supervisory employees of Federal 
service contractors or subcontractors. See Sec. 9.2(9) of this part, 
definition of managerial employee and supervisory employee.



                         Subpart B_Requirements



Sec. 9.11  Contracting agency requirements.

    (a) Contract Clause. The contract clause set forth in Appendix A of 
this part shall be included in covered service contracts, and 
solicitations for such contracts, that succeed contracts for performance 
of the same or similar services at the same location.
    (b) Notice. Where a contract will be awarded to a successor for the 
same or similar services to be performed at the same location, the 
Contracting Officer will ensure that the predecessor contractor provide 
written notice to service employees of the predecessor contractor of 
their possible right to an offer of employment. Such notice shall be 
either posted in a conspicuous place at the worksite or delivered to the 
employees individually. Where the predecessor contractor's workforce is 
comprised of a significant portion of workers who are not fluent in 
English, the notice shall be provided in both English and a language 
with which the employees are more familiar. Multiple foreign language 
notices are required where significant portions of the workforce speak 
different foreign languages and there is no common language. Contracting 
Officers may advise contractors to provide the notice set forth in 
Appendix B to this part in either a physical posting at the job site, or 
another format that effectively provides individual notice such as 
individual paper notices or effective email notification to the affected 
employees. To be effective, email notification must result in an 
electronic delivery receipt or some other reliable confirmation that the 
intended recipient received the notice. Any particular determination of 
the adequacy of a notification, regardless of the method used, must be 
fact-dependent and made on a case-by-case basis.
    (c) Disclosures. The Contracting Officer shall provide the incumbent 
contractor's list of employees referenced in Sec. 9.12(e) of this part 
to the successor contractor and, on request, to employees or their 
representatives.
    (d) Actions on complaints. (1) Reporting. (i) Reporting time frame. 
Within 14 days of being contacted by the Wage and Hour Division, the 
Contracting Officer shall forward all information listed in paragraph 
(d)(1)(ii) of this section to the Branch of Government Contracts 
Enforcement, Wage and Hour Division, U.S. Department of Labor, 
Washington, DC 20210.
    (ii) Report contents: Except as provided by paragraph (d)(3) of this 
section, the Contracting Officer shall forward to the Branch of 
Government Contracts Enforcement, Wage and Hour Division, U.S. 
Department of Labor, Washington, DC 20210 any:
    (A) Complaint of contractor noncompliance with this part;

[[Page 165]]

    (B) Available statements by the employee or the contractor regarding 
the alleged violation;
    (C) Evidence that a seniority list was issued by the predecessor and 
provided to the successor;
    (D) A copy of the seniority list;
    (E) Evidence that the nondisplacement contract clause was included 
in the contract or that the contract was exempted by the contracting 
agency;
    (F) Information concerning known settlement negotiations between the 
parties, if applicable;
    (G) Any other relevant facts known to the Contracting Officer or 
other information requested by the Wage and Hour Division.
    (2) [Reserved]



Sec. 9.12  Contractor requirements and prerogatives.

    (a) General. (1) No employment openings prior to right of first 
refusal. Except as provided under the exclusions listed in Sec. 9.4 of 
this part or paragraphs (c) and (d) of this section, a successor 
contractor or subcontractor shall fill no employment openings under the 
contract prior to making good faith offers of employment (i.e., a right 
of first refusal to employment on the contract), in positions for which 
the employees are qualified, to those employees employed under the 
predecessor contract whose employment will be terminated as a result of 
award of the contract or the expiration of the contract under which the 
employees were hired. The contractor and its subcontractors shall make a 
bona fide, express offer of employment to a position for which the 
employee is qualified to each employee and shall state the time within 
which the employee must accept such offer, but in no case shall the 
period within which the employee must accept the offer of employment be 
less than 10 days.
    (2) No seniority list available. The successor contractor's 
obligation to offer a right of first refusal exists even if the 
successor contractor has not been provided a list of the predecessor 
contractor's employees or the list does not contain the names of all 
persons employed during the final month of contract performance.
    (3) Determining eligibility. While a person's entitlement to a job 
offer under this part usually will be based on whether he or she is 
named on the certified list of all service employees working under the 
predecessor's contract or subcontracts during the last month of contract 
performance, a contractor must also accept other credible evidence of an 
employee's entitlement to a job offer under this part. For example, even 
if a person's name does not appear on the list of employees on the 
predecessor contract, an employee's assertion of an assignment to work 
on a contract during the predecessor's last month of performance coupled 
with contracting agency staff verification could constitute credible 
evidence of an employee's entitlement to a job offer, as otherwise 
provided for in this part. Similarly, an employee could demonstrate 
eligibility by producing a paycheck stub identifying the work location 
and dates worked.
    (b) Method of job offer. (1) Bona-fide offer. Except as otherwise 
provided in this part, a contractor must make a bona fide express offer 
of employment to each qualified employee on the predecessor contract 
before offering employment on the contract to any other person. In 
determining whether an employee is entitled to a bona fide, express 
offer of employment, a contractor may consider the exceptions set forth 
in paragraph (c) of this section and may utilize employment screening 
processes (i.e., drug tests, background checks, security clearance 
checks, and similar pre-employment screening mechanisms) only when such 
processes are provided for by the contracting agency, are conditions of 
the service contract, and are consistent with the Executive Order. The 
obligation to offer employment under this part shall cease upon the 
employee's first refusal of a bona fide offer to employment on the 
contract.
    (2) Establishing time limit for employee response. The contractor 
shall state the time within which an employee must accept an employment 
offer, but in no case may the period in which the employee has to accept 
the offer be less than 10 days.

[[Page 166]]

    (3) Process. The successor contractor must, in writing or orally, 
offer employment to each employee. See also paragraph (f) of this 
section, Recordkeeping. In order to ensure that the offer is effectively 
communicated, the successor contractor should take reasonable efforts to 
make the offer in a language that each worker understands. For example, 
if the contractor holds a meeting for a group of employees on the 
predecessor contract in order to extend the employment offers, having a 
co-worker or other person who fluently translates for employees who are 
not fluent in English would satisfy this provision.
    (4) Different job position. As a general matter, an offer of 
employment on the successor's contract will be presumed to be a bona 
fide offer of employment, even if it is not for a position similar to 
the one the employee previously held but one for which the employee is 
qualified. If a question arises concerning an employee's qualifications, 
that question shall be decided based upon the employee's education and 
employment history, with particular emphasis on the employee's 
experience on the predecessor contract. A contractor must base its 
decision regarding an employee's qualifications on credible information 
provided by a knowledgeable source such as the predecessor contractor, 
the local supervisor, the employee, or the contracting agency.
    (5) Different employment terms and conditions. An offer of 
employment to a position on the contract under different employment 
terms and conditions, including changes to pay or benefits, than the 
employee held with the predecessor contractor will be considered bona 
fide, if the reasons are not related to a desire that the employee 
refuse the offer or that other employees be hired for the offer.
    (6) Termination after contract commencement. Where an employee is 
terminated under circumstances suggesting the offer of employment may 
not have been bona fide, the facts and circumstances of the offer and 
the termination will be closely examined during any compliance action to 
ensure the offer was bona fide.
    (c) Exceptions. The successor contractor will bear the 
responsibility of demonstrating the appropriateness of claiming any of 
the following exceptions to the nondisplacement provisions subject to 
this part.
    (1) Nondisplaced employees. (i) A contractor or subcontractor is not 
required to offer employment to any employee of the predecessor 
contractor who will be retained by the predecessor contractor.
    (ii) The contractor must presume that all employees hired to work 
under a predecessor's Federal service contract will be terminated as a 
result of the award of the successor contract, absent an ability to 
demonstrate a reasonable belief to the contrary that is based upon 
credible information provided by a knowledgeable source such as the 
predecessor contractor or the employee.
    (2) Successor's current employees. A contractor or subcontractor may 
employ under the contract any employee who has worked for the contractor 
or subcontractor for at least 3 months immediately preceding the 
commencement of the contract and who would otherwise face lay-off or 
discharge.
    (3) Predecessor contractor's non-service employees. (i) A contractor 
or subcontractor is not required to offer employment to any employee of 
the predecessor who is not a service employee. See Sec. 9.2 of this part 
for definitions of employee, managerial employee and supervisory 
employee.
    (ii) The contractor must presume that all employees hired to work 
under a predecessor's Federal service contract are service employees, 
absent an ability to demonstrate a reasonable belief to the contrary 
that is based upon credible information provided by a knowledgeable 
source such as the predecessor contractor, the employee, or the 
contracting agency. Information regarding the general business practices 
of the predecessor contractor or the industry is not sufficient to claim 
this exemption.
    (4) Employee's past unsuitable performance. (i) A contractor or 
subcontractor is not required to offer employment to any employee of the 
predecessor contractor for whom the contractor or any

[[Page 167]]

of its subcontractors reasonably believes, based on the particular 
employee's past performance, has failed to perform suitably on the job.
    (ii)(A) The contractor must presume that all employees working under 
the predecessor contract in the last month of performance performed 
suitable work on the contract, absent an ability to demonstrate a 
reasonable belief to the contrary that is based upon written credible 
information provided by a knowledgeable source such as the predecessor 
contractor and its subcontractors, the local supervisor, the employee, 
or the contracting agency.
    (B) For example, a contractor may demonstrate its reasonable belief 
that the employee, in fact, failed to perform suitably on the 
predecessor contract through written evidence of disciplinary action 
taken for poor performance or evidence directly from the contracting 
agency that the particular employee did not perform suitably. The 
performance determination must be made on an individual basis for each 
employee. Information regarding the general performance of the 
predecessor contractor is not sufficient to claim this exception.
    (5) Non-Federal work. (i) A contractor or subcontractor is not 
required to offer employment to any employee hired to work under a 
predecessor's Federal service contract and one or more nonfederal 
service contracts as part of a single job, provided that the employee 
was not deployed in a manner that was designed to avoid the purposes of 
this part.
    (ii) The successor contractor must presume that no employees hired 
to work under a predecessor's Federal service contract worked on one or 
more nonfederal service contracts as part of a single job, unless the 
successor can demonstrate a reasonable belief to the contrary. The 
successor contractor must demonstrate that its belief is reasonable and 
is based upon credible information provided by a knowledgeable source 
such as the predecessor contractor, the local supervisor, the employee, 
or the contracting agency. Information regarding the general business 
practices of the predecessor contractor or the industry is not 
sufficient.
    (iii) A contractor that makes a reasonable determination that a 
predecessor contractor's employee also performed work on one or more 
nonfederal service contracts as part of a single job must also make a 
reasonable determination that the employee was not deployed in such a 
way that was designed to avoid the purposes of this part. The successor 
contractor must demonstrate that its belief is reasonable and is based 
upon credible information that has been provided by a knowledgeable 
source such as the employee or the contracting agency. For example, 
evidence from a contracting agency that an employee worked only 
occasionally on a Federal service contract combined with a statement 
from the employee indicating fulltime employment with the predecessor 
would, absent other facts, constitute the basis for a reasonable belief 
that there is no obligation to offer employment to the employee. On the 
other hand, information suggesting a change in how a predecessor 
contractor deployed employees near the end of the contract period could 
suggest an effort to evade the purposes of this part.
    (d) Reduced staffing. (1) Contractor determines how many employees. 
(i) A contractor or subcontractor shall determine the number of 
employees necessary for efficient performance of the contract or 
subcontract and, for bona fide staffing or work assignment reasons, may 
elect to employ fewer employees than the predecessor contractor employed 
in connection with performance of the work. Thus, the successor 
contractor need not offer employment on the contract to all employees on 
the predecessor contract, but must offer employment only to the number 
of eligible employees the successor contractor believes necessary to 
meet its anticipated staffing pattern, except that:
    (ii) Where, in accordance with this authority to employ fewer 
employees, a successor contractor does not offer employment to all the 
predecessor contract employees, the obligation to offer employment shall 
continue for 90 days after the successor contractor's first date of 
performance on the contract. The contractor's obligation under this

[[Page 168]]

part will end when all of the predecessor contract employees have 
received a bona fide job offer, including stating the time within which 
the employee must accept such offer, which must be no less than 10 days, 
or the 90-day window of obligation has expired. The following three 
examples demonstrate the principle.
    (A) A contractor with 18 employment openings and a list of 20 
employees from the predecessor contract must continue to offer 
employment to individuals on the list until 18 of the employees accept 
the contractor's employment offer or until the remaining employees have 
rejected the offer. If an employee quits or is terminated from the 
successor contract within 90 days of the first date of contract 
performance, the contractor must first offer employment to any remaining 
eligible employees of the predecessor contract.
    (B) A successor contractor originally offers 20 jobs to predecessor 
contract employees on a contract that had 30 positions under the 
predecessor contractor. The first 20 predecessor contract employees the 
successor contractor approaches accept the employment offer. Within a 
month of commencing work on the contract, the successor determines that 
it must hire seven additional employees to perform the contract 
requirements. The first three predecessor contract employees to whom the 
successor offers employment decline the offer; however, the next four 
predecessor contract employees accept the offers. In accordance with the 
provisions of this section, the successor contractor offers employment 
on the contract to the three remaining predecessor contract employees 
who all accept; however, two employees on the contract quit five weeks 
later. The successor contractor has no further obligation under this 
part to make a second employment offer to the persons who previously 
declined an offer of employment on the contract.
    (C) A successor contractor reduces staff on a successor contract by 
two positions from the predecessor contract's staffing pattern. Each 
predecessor contract employee the successor approaches accepts the 
employment offer; therefore, employment offers are not made to two 
predecessor contract employees. The successor contractor terminates an 
employee five months later. The successor contractor has no obligation 
to offer employment to the two remaining employees from the predecessor 
contract, because more than 90 days have passed since the successor 
contractor's first date of performance on the contract.
    (2) Contractor determines which employees. The contractor, subject 
to provisions of this part and other applicable restrictions (including 
non-discrimination laws and regulations), will determine to which 
employees it will offer employment. See Sec. 9.1(b) regarding compliance 
with other requirements.
    (3) Changes to staffing pattern. Where a contractor reduces the 
number of employees in any occupation on a contract with multiple 
occupations, resulting in some displacement, the contractor shall 
scrutinize each employee's qualifications in order to offer positions to 
the greatest number of predecessor contract employees possible. Example: 
A successor contract is awarded for a food preparation and services 
contract with Cook II, Cook I and dishwasher positions. The Cook II 
position requires a higher level of skill than the Cook I position. The 
successor contractor reconfigures the staffing pattern on the contract 
by increasing the number persons employed as a Cook II and Dishwashers 
but reducing the number of Cook I employees. The successor contractor 
must examine the qualifications of each Cook I to see if a position as 
either a Cook II or Dishwasher is possible. Conversely, were the 
contractor to increase the number of Cook I employees, decrease the 
number of Cook II employees, and keep the same number of Dishwashers the 
contractor would generally be able offer Cook I positions to some Cook 
II employees, because the Cook II performs a higher level occupation. 
The contractor would also need to consider whether offering Dishwasher 
positions to Cook I employees would result in less overall displacement. 
Finally, should some Dishwashers decline the employment offer, the 
Contractor would need to consider the qualifications of the Cooks at 
both levels and offer positions on the contract in a way that results in 
the least displacement.

[[Page 169]]

    (e) Contractor obligations near end of contract performance. (1) 
Certified list of employees provided 30 days before contract completion. 
The contractor shall, not less than 30 days before completion of the 
contractor's performance of services on a contract, furnish the 
Contracting Officer with a list of the names of all service employees 
working under the contract and its subcontracts at the time the list is 
submitted. The list shall also contain anniversary dates of employment 
of each service employee under the contract and its predecessor 
contracts with either the current or predecessor contractors or their 
subcontractors. Assuming there are no changes to the workforce before 
the contract is completed, the contractor may use the list submitted, or 
to be submitted, to satisfy the requirements of the contract clause 
specified at 29 CFR 4.6(l)(2) to meet this provision.
    (2) Certified list of employees provided 10 days before contract 
completion. Where changes to the workforce are made after the submission 
of the certified list described in paragraph (e)(1) of this section, the 
contractor shall, not less than 10 days before completion of the 
contractor's performance of services on a contract, furnish the 
Contracting Officer with a certified list of the names of all service 
employees employed within the last month of contract performance. The 
list shall also contain anniversary dates of employment and, where 
applicable, dates of separation of each service employee under the 
contract and its predecessor contracts with either the current or 
predecessor contractors or their subcontractors. The contractor may use 
the list submitted to satisfy the requirements of the contract clause 
specified at 29 CFR 4.6(l)(2) to meet this provision.
    (f) Recordkeeping. (1) Form of records. This part prescribes no 
particular order or form of records for contractors. A contractor may 
use records developed for any purpose to satisfy the requirements of 
this part, provided the records otherwise meet the requirements and 
purposes of this part and are fully accessible. The requirements of this 
part shall apply to all records regardless of their format (e.g., paper 
or electronic).
    (2) Records to be retained. (i) The contractor shall maintain copies 
of any written offers of employment or a contemporaneous written record 
of any oral offers of employment, including the date, location, and 
attendance roster of any employee meeting(s) at which the offers were 
extended, a summary of each meeting, a copy of any written notice that 
may have been distributed, and the names of the employees from the 
predecessor contract to whom an offer was made.
    (ii) The contractor shall maintain a copy of any record that forms 
the basis for any exclusion or exemption claimed under this part.
    (iii) The contractor shall maintain a copy of the employee list 
received from the contracting agency. See paragraph (e) of this section, 
contractor obligations near end of contract.
    (iv) Every contractor who makes retroactive payment of wages or 
compensation under the supervision of the Administrator of the Wage and 
Hour Division pursuant to Sec. 9.24(b) of this part, shall:
    (A) Record and preserve, as an entry on the pay records, the amount 
of such payment to each employee, the period covered by such payment, 
and the date of payment.
    (B) Prepare a report of each such payment on a receipt form provided 
by or authorized by the Wage and Hour Division, and
    (1) Preserve a copy as part of the records,
    (2) Deliver a copy to the employee, and
    (3) File the original, as evidence of payment by the contractor and 
receipt by the employee, with the Administrator or an authorized 
representative within 10 days after payment is made.
    (3) Records retention period. The contractor shall retain records 
prescribed by section Sec. 9.12(f)(2) of this part for not less than a 
period of three years from the date the records were created.
    (4) Disclosure. The contractor must provide copies of such 
documentation upon request of any authorized representative of the 
contracting agency or Department of Labor.
    (g) Investigations. The contractor shall cooperate in any review or 
investigation conducted pursuant to this

[[Page 170]]

part and shall not interfere with the investigation or intimidate, 
blacklist, discharge, or in any other manner discriminate against any 
person because such person has cooperated in an investigation or 
proceeding under this part or has attempted to exercise any rights 
afforded under this part. This obligation to cooperate with 
investigations is not limited to investigations of the contractor's own 
actions, but also includes investigations related to other contractors 
(e.g., predecessor and subsequent contractors) and subcontractors.



                          Subpart C_Enforcement



Sec. 9.21  Complaints.

    With Wage and Hour Division. Any employee(s) or authorized employee 
representative(s) of the predecessor contractor who believes the 
successor contractor has violated this part may file a complaint with 
the Wage and Hour Division within 120 days from the first date of 
contract performance. The employee may file a complaint directly with 
the Branch of Government Contracts Enforcement, Wage and Hour Division, 
U.S. Department of Labor, Washington, DC 20210.



Sec. 9.22  Wage and Hour Division conciliation.

    After obtaining information regarding alleged violations, the Wage 
and Hour Division may contact the successor contractor about the 
complaint and attempt to conciliate and reach a resolution that is 
consistent with the requirements of this part and is acceptable to both 
the complainant(s) and the successor contractor.



Sec. 9.23  Wage and Hour Division investigation.

    (a) Initial investigation. The Administrator may initiate an 
investigation under this part either as the result of the unsuccessful 
conciliation of a complaint or at any time on his or her own initiative. 
As part of the investigation, the Administrator may inspect the records 
of the predecessor and successor contractors (and make copies or 
transcriptions thereof), question the predecessor and successor 
contractors and any employees of these contractors, and require the 
production of any documentary or other evidence deemed necessary to 
determine whether a violation of this part (including conduct warranting 
imposition of ineligibility sanctions pursuant to Sec. 9.24(d) of this 
part) has occurred.
    (b) Subsequent investigations. The Administrator may conduct a new 
investigation or issue a new determination if the Administrator 
concludes circumstances warrant, such as where the proceedings before an 
Administrative Law Judge reveal that there may have been violations with 
respect to other employees of the contractor, where imposition of 
ineligibility sanctions is appropriate, or where the contractor has 
failed to comply with an order of the Secretary.



Sec. 9.24  Remedies and sanctions for violations of this part.

    (a) Authority. Executive Order 13495 provides that the Secretary 
shall have the authority to issue orders prescribing appropriate 
remedies, including, but not limited to, requiring the contractor to 
offer employment, in positions for which the employees are qualified, to 
employees from the predecessor contract and the payment of wages lost.
    (b) Unpaid wages or other relief due. In addition to satisfying any 
costs imposed under Secs. 9.34(j) or 9.35(d) of this part, a contractor 
who violates any provision of this part shall take appropriate action to 
abate the violation, which may include hiring each affected employee in 
a position on the contract for which the employee is qualified, together 
with compensation (including lost wages), terms, conditions, and 
privileges of that employment.
    (c) Withholding of funds. (1) Unpaid wages or other relief. After an 
investigation and a determination by the Administrator that lost wages 
or other monetary relief is due, the Administrator may direct that so 
much of the accrued payments due on either the contract or any other 
contract between the contractor and the Government shall be withheld as 
are necessary to pay the moneys due. Upon the final

[[Page 171]]

order of the Secretary that such moneys are due, the Administrator may 
direct that such withheld funds be transferred to the Department of 
Labor for disbursement.
    (2) List of employees. If the Contracting Officer or the 
Administrator, upon final order of the Secretary, finds that the 
predecessor contractor has failed to provide a list of the names of 
employees working under the contract in accordance with Sec. 9.12(e) of 
this part, the Contracting Officer may in his or her discretion, or upon 
request by the Administrator, take such action as may be necessary to 
cause the suspension of the payment of contract funds until such time as 
the list is provided to the Contracting Officer.
    (d) Ineligibility listing. Where the Secretary finds that a 
contractor has failed to comply with any order of the Secretary, or has 
committed willful or aggravated violations of this part, the Secretary 
may order that the contractor and its responsible officers, and any firm 
in which the contractor has a substantial interest, shall be ineligible 
to be awarded any contract or subcontract of the United States for a 
period of up to three years. Neither an order for debarment of any 
contractor or subcontractor from further Government contracts under this 
section nor the inclusion of a contractor or subcontractor on a 
published list of noncomplying contractors shall be carried out without 
affording the contractor or subcontractor an opportunity for a hearing.



 Subpart D_Administrator's Determination, Mediation, and Administrative 
                               Proceedings



Sec. 9.31  Determination of the Administrator.

    (a) Written determination. Upon completion of an investigation under 
Sec. 9.23 of this part, and provided that a resolution is not reached 
that is consistent with the requirements of this part and acceptable to 
both the complainant(s) and the successor contractor, the Administrator 
will issue a written determination of whether a violation has occurred. 
The determination shall contain a statement of the investigation 
findings and conclusions. A determination that a violation occurred 
shall address appropriate relief and the issue of ineligibility 
sanctions where appropriate. The Administrator will notify any 
complainant(s); employee representative(s); contractor, including the 
prime contractor if a subcontractor is implicated; and contractor 
representative(s) by personal service or by registered or certified mail 
to the last known address, of the investigation findings. Where service 
by certified mail is not accepted by the party, the Administrator may 
exercise discretion to serve the determination by regular mail.
    (b) Notice to parties and effect. (1) Relevant facts in dispute. 
Except as provided in paragraph (b)(2) of this section, the 
determination of the Administrator shall advise the parties (ordinarily 
any complainant, the successor contractor, and any of their 
representatives) that the notice of determination shall become the final 
order of the Secretary and shall not be appealable in any administrative 
or judicial proceeding unless, postmarked within 20 days of the date of 
the determination of the Administrator, the Chief Administrative Law 
Judge receives a request for a hearing pursuant to Sec. 9.32(b)(1) of 
this part. A detailed statement of the reasons why the Administrator's 
ruling is in error, including facts alleged to be in dispute, if any, 
shall be submitted with the request for a hearing. The Administrator's 
determination not to seek ineligibility sanctions shall not be 
appealable.
    (2) Relevant facts not in dispute. If the Administrator concludes 
that no relevant facts are in dispute, the parties and their 
representatives, if any, will be so advised and will be further advised 
that the determination shall become the final order of the Secretary and 
shall not be appealable in any administrative or judicial proceeding 
unless, postmarked within 20 days of the date of the determination of 
the Administrator, a petition for review is filed with the 
Administrative Review Board pursuant to Sec. 9.32(b)(2) of this part. 
The determination will further advise that if an aggrieved party 
disagrees with the factual findings or believes there are relevant facts 
in dispute, the aggrieved party may advise

[[Page 172]]

the Administrator of the disputed facts and request a hearing by letter, 
which must be received within 20 days of the date of the determination. 
The Administrator will either refer the request for a hearing to the 
Chief Administrative Law Judge, or notify the parties and their 
representatives, if any, of the determination of the Administrator that 
there is no relevant issue of fact and that a petition for review may be 
filed with the Administrative Review Board within 20 days of the date of 
the notice, in accordance with the procedures at Sec. 9.32(b)(2) of this 
part.



Sec. 9.32  Requesting appeals.

    (a) General. If any party desires review of the determination of the 
Administrator, including judicial review, a request for an 
Administrative Law Judge hearing or petition for review by the 
Administrative Review Board must first be filed in accordance with 
Sec. 9.31(b) of this part.
    (b) Process. (1) For Administrative Law Judge hearing. (i) General. 
Any aggrieved party may file a request for a hearing by an 
Administrative Law Judge within 20 days of the determination of the 
Administrator. The request for a hearing shall be accompanied by a copy 
of the determination of the Administrator and may be filed by U.S. mail, 
facsimile (FAX), telegram, hand delivery, next-day delivery, or a 
similar service. At the same time, a copy of any request for a hearing 
shall be sent to the complainant(s) or successor contractor, and their 
representatives, if any, as appropriate; the Administrator of the Wage 
and Hour Division; and the Associate Solicitor, Division of Fair Labor 
Standards, U.S. Department of Labor, Washington, DC 20210.
    (ii) By the complainant. The complainant or any other interested 
party may request a hearing where the Administrator determines, after 
investigation, that there is no basis for a finding that a contractor 
has committed violation(s), or where the complainant or other interested 
party believes that the Administrator has ordered inadequate monetary 
relief. In such a proceeding, the party requesting the hearing shall be 
the prosecuting party and the contractor shall be the respondent; the 
Administrator may intervene as a party or appear as amicus curiae at any 
time in the proceeding, at the Administrator's discretion.
    (iii) By the contractor. The contractor or any other interested 
party may request a hearing where the Administrator determines, after 
investigation, that the contractor has committed violation(s). In such a 
proceeding, the Administrator shall be the prosecuting party and the 
contractor shall be the respondent.
    (2) For Administrative Review Board review. (i) General. Any 
aggrieved party desiring review of a determination of the Administrator 
in which there were no relevant facts in dispute, or an Administrative 
Law Judge's decision, shall file a written petition for review with the 
Administrative Review Board that must be postmarked within 20 days of 
the date of the determination or decision and shall be served on all 
parties and, where the case involves an appeal from an Administrative 
Law Judge's decision, the Chief Administrative Law Judge. See also 
Sec. 9.32(b)(1) of this part.
    (ii) Contents and service. (A) A petition for review shall refer to 
the specific findings of fact, conclusions of law, or order at issue.
    (B) Copies of the petition and all briefs shall be served on the 
Administrator, Wage and Hour Division, and on the Associate Solicitor, 
Division of Fair Labor Standards, U.S. Department of Labor, Washington, 
DC 20210.
    (c) Effect of filing. If a timely request for hearing or petition 
for review is filed, the determination of the Administrator or the 
decision of the Administrative Law Judge shall be inoperative unless and 
until the Administrative Review Board issues an order affirming the 
determination or decision, or the determination or decision otherwise 
becomes a final order of the Secretary. If a petition for review 
concerns only the imposition of ineligibility sanctions, however, the 
remainder of the decision shall be effective immediately. No judicial 
review shall be available unless a timely petition for review to the 
Administrative Review Board is first filed.

[[Page 173]]



Sec. 9.33  Mediation.

    (a) General. The parties are encouraged to resolve disputes in 
accordance with the conciliation procedures set forth at Sec. 9.22 of 
this part, or, where such efforts have failed, to utilize settlement 
judges to mediate settlement negotiations pursuant to 29 CFR 18.9 when 
those provisions apply. At any time after commencement of a proceeding, 
the parties jointly may move to defer the hearing for a reasonable time 
to permit negotiation of a settlement or an agreement containing 
findings and an order disposing of the whole or any part of the 
proceeding.
    (b) Appointing settlement judge for cases scheduled with the Office 
of Administrative Law Judges. Upon a request by a party or the presiding 
Administrative Law Judge, the Chief Administrative Law Judge may appoint 
a settlement judge. The Chief Administrative Law Judge has sole 
discretion to decide whether to appoint a settlement judge, except that 
a settlement judge shall not be appointed when a party objects to 
referral of the matter to a settlement judge.



Sec. 9.34  Administrative Law Judge hearings.

    (a) Authority. (1) General. The Office of Administrative Law Judges 
has jurisdiction to hear and decide appeals pursuant to Sec. 9.31(b)(1) 
of this part concerning questions of law and fact from determinations of 
the Administrator issued under Sec. 9.31 of this part. In considering 
the matters within the scope of its jurisdiction, the Administrative Law 
Judge shall act as the authorized representative of the Secretary and 
shall act fully and, subject to an appeal filed under Sec. 9.32(b)(2) of 
this part, finally on behalf of the Secretary concerning such matters.
    (2) Limit on scope of review. (i) The Administrative Law Judge shall 
not have jurisdiction to pass on the validity of any provision of this 
part.
    (ii) The Equal Access to Justice Act, as amended, does not apply to 
hearings under this part. Accordingly, an Administrative Law Judge shall 
have no authority to award attorney fees and/or other litigation 
expenses pursuant to the provisions of the Equal Access to Justice Act 
for any proceeding under this part.
    (b) Scheduling. If the case is not stayed to attempt settlement in 
accordance with Sec. 9.33(a) of this part, the Administrative Law Judge 
to whom the case is assigned shall, within 15 calendar days following 
receipt of the request for hearing, notify the parties and any 
representatives, of the day, time, and place for hearing. The date of 
the hearing shall not be more than 60 days from the date of receipt of 
the request for hearing.
    (c) Dismissing challenges for failure to participate. The 
Administrative Law Judge may, at the request of a party or on his/her 
own motion, dismiss a challenge to a determination of the Administrator 
upon the failure of the party requesting a hearing or his/her 
representative to attend a hearing without good cause; or upon the 
failure of said party to comply with a lawful order of the 
Administrative Law Judge.
    (d) Administrator's participation. At the Administrator's 
discretion, the Administrator has the right to participate as a party or 
as amicus curiae at any time in the proceedings, including the right to 
petition for review of a decision of an Administrative Law Judge in a 
case in which the Administrator has not previously participated. The 
Administrator shall participate as a party in any proceeding in which 
the Administrator has found any violation of this part, except where the 
complainant or other interested party challenges only the amount of 
monetary relief. See also Sec. 9.32(b)(2)(i)(C) of this part.
    (e) Agency participation. A Federal agency that is interested in a 
proceeding may participate, at the agency's discretion, as amicus curiae 
at any time in the proceedings. At the request of such Federal agency, 
copies of all pleadings in a case shall be served on the Federal agency, 
whether or not the agency is participating in the proceeding.
    (f) Requesting documents. Copies of the request for hearing and 
documents filed in all cases, whether or not the Administrator is 
participating in the proceeding, shall be sent to the Administrator, 
Wage and Hour Division, and to the Associate Solicitor, Division of

[[Page 174]]

Fair Labor Standards, U.S. Department of Labor, Washington, DC 20210.
    (g) Rules of practice. (1) The rules of practice and procedure for 
administrative hearings before the Office of Administrative Law Judges 
at 29 CFR part 18, subpart A, shall be applicable to the proceedings 
provided by this section. This part is controlling to the extent it 
provides any rules of special application that may be inconsistent with 
the rules in 29 CFR part 18, subpart A. The Rules of Evidence at 29 CFR 
18, subpart B, shall not apply. Rules or principles designed to assure 
production of the most probative evidence available shall be applied. 
The Administrative Law Judge may exclude evidence that is immaterial, 
irrelevant, or unduly repetitive.
    (h) Decisions. The Administrative Law Judge shall issue a decision 
within 60 days after completion of the proceeding at which evidence was 
submitted. The decision shall contain appropriate findings, conclusions, 
and an order and be served upon all parties to the proceeding.
    (i) Orders. Upon the conclusion of the hearing and the issuance of a 
decision that a violation has occurred, the Administrative Law Judge 
shall issue an order that the successor contractor take appropriate 
action to abate the violation, which may include hiring each affected 
employee in a position on the contract for which the employee is 
qualified, together with compensation (including lost wages), terms, 
conditions, and privileges of that employment. Where the Administrator 
has sought ineligibility sanctions, the order shall also address whether 
such sanctions are appropriate.
    (j) Costs. If an order finding the successor contractor violated 
this part is issued, the Administrative Law Judge may assess against the 
contractor a sum equal to the aggregate amount of all costs (not 
including attorney fees) and expenses reasonably incurred by the 
aggrieved employee(s) in the proceeding. This amount shall be awarded in 
addition to any unpaid wages or other relief due under Sec. 9.24(b) of 
this part.
    (k) Finality. The decision of the Administrative Law Judge shall 
become the final order of the Secretary, unless a petition for review is 
timely filed with the Administrative Review Board as set forth in 
Sec. 9.32(b)(2) of this part.



Sec. 9.35  Administrative Review Board proceedings.

    (a) Authority. (1) General. The Administrative Review Board has 
jurisdiction to hear and decide in its discretion appeals pursuant to 
Sec. 9.31(b)(2) concerning questions of law and fact from determinations 
of the Administrator issued under Sec. 9.31 of this part and from 
decisions of Administrative Law Judges issued under Sec. 9.34 of this 
part. In considering the matters within the scope of its jurisdiction, 
the Board shall act as the authorized representative of the Secretary 
and shall act fully and finally on behalf of the Secretary concerning 
such matters.
    (2) Limit on scope of review. (i) The Board shall not have 
jurisdiction to pass on the validity of any provision of this part. The 
Board is an appellate body and shall decide cases properly before it on 
the basis of substantial evidence contained in the entire record before 
it. The Board shall not receive new evidence into the record.
    (ii) The Equal Access to Justice Act, as amended, does not apply to 
proceedings under this part. Accordingly, for any proceeding under this 
part, the Administrative Review Board shall have no authority to award 
attorney fees and/or other litigation expenses pursuant to the 
provisions of the Equal Access to Justice Act for any proceeding under 
this part.
    (b) Decisions. The Board's final decision shall be issued within 90 
days of the receipt of the petition for review and shall be served upon 
all parties by mail to the last known address and on the Chief 
Administrative Law Judge (in cases involving an appeal from an 
Administrative Law Judge's decision).
    (c) Orders. If the Board concludes that the contractor has violated 
this part, the final order shall order action to abate the violation, 
which may include hiring each affected employee in a position on the 
contract for which the employee is qualified, together with compensation 
(including lost wages), terms, conditions, and privileges of that 
employment. Where the Administrator has sought imposition

[[Page 175]]

of ineligibility sanctions, the Board shall also determine whether an 
order imposing ineligibility sanctions is appropriate.
    (d) Costs. If a final order finding the successor contractor 
violated this part is issued, the Board may assess against the 
contractor a sum equal to the aggregate amount of all costs (not 
including attorney fees) and expenses reasonably incurred by the 
aggrieved employee(s) in the proceeding. This amount shall be awarded in 
addition to any unpaid wages or other relief due under Sec. 9.24(b) of 
this part.
    (e) Finality. The decision of the Administrative Review Board shall 
become the final order of the Secretary.



               Sec. Appendix A to Part 9--Contract Clause

                  Nondisplacement of Qualified Workers

    (a) Consistent with the efficient performance of this contract, the 
contractor and its subcontractors shall, except as otherwise provided 
herein, in good faith offer those employees (other than managerial and 
supervisory employees) employed under the predecessor contract whose 
employment will be terminated as a result of award of this contract or 
the expiration of the contract under which the employees were hired, a 
right of first refusal of employment under this contract in positions 
for which employees are qualified. The contractor and its subcontractors 
shall determine the number of employees necessary for efficient 
performance of this contract and may elect to employ fewer employees 
than the predecessor contractor employed in connection with performance 
of the work. Except as provided in paragraph (b) there shall be no 
employment opening under this contract, and the contractor and any 
subcontractors shall not offer employment under this contract, to any 
person prior to having complied fully with this obligation. The 
contractor and its subcontractors shall make a bona fide, express offer 
of employment to each employee as provided herein and shall state the 
time within which the employee must accept such offer, but in no case 
shall the period within which the employee must accept the offer of 
employment be less than 10 days.
    (b) Notwithstanding the obligation under paragraph (a) above, the 
contractor and any subcontractors (1) may employ under this contract any 
employee who has worked for the contractor or subcontractor for at least 
3 months immediately preceding the commencement of this contract and who 
would otherwise face lay-off or discharge, (2) are not required to offer 
a right of first refusal to any employee(s) of the predecessor 
contractor who are not service employees within the meaning of the 
Service Contract Act of 1965, as amended, 41 U.S.C. 6701(3), and (3) are 
not required to offer a right of first refusal to any employee(s) of the 
predecessor contractor whom the contractor or any of its subcontractors 
reasonably believes, based on the particular employee's past 
performance, has failed to perform suitably on the job.
    (c) In accordance with Federal Acquisition Regulation 52.222-41(n), 
the contractor shall, not less than 10 days before completion of this 
contract, furnish the Contracting Officer a certified list of the names 
of all service employees working under this contract and its 
subcontracts during the last month of contract performance. The list 
shall also contain anniversary dates of employment of each service 
employee under this contract and its predecessor contracts either with 
the current or predecessor contractors or their subcontractors. The 
Contracting Officer will provide the list to the successor contractor, 
and the list shall be provided on request, to employees or their 
representatives.
    (d) If it is determined, pursuant to regulations issued by the 
Secretary of Labor (Secretary), that the contractor or its 
subcontractors are not in compliance with the requirements of this 
clause or any regulation or order of the Secretary, appropriate 
sanctions may be imposed and remedies invoked against the contractor or 
its subcontractors, as provided in Executive Order 13495, the 
regulations, and relevant orders of the Secretary, or as otherwise 
provided by law.
    (e) In every subcontract entered into in order to perform services 
under this contract, the contractor will include provisions that ensure 
that each subcontractor will honor the requirements of paragraphs (a) 
through (b) with respect to the employees of a predecessor subcontractor 
or subcontractors working under this contract, as well as of a 
predecessor contractor and its subcontractors. The subcontract shall 
also include provisions to ensure that the subcontractor will provide 
the contractor with the information about the employees of the 
subcontractor needed by the contractor to comply with paragraph (c), 
above. The contractor will take such action with respect to any such 
subcontract as may be directed by the Secretary as a means of enforcing 
such provisions, including the imposition of sanctions for 
noncompliance: provided, however, that if the contractor, as a result of 
such direction, becomes involved in litigation with a subcontractor, or 
is threatened with such involvement, the contractor may request that the 
United States enter into such litigation to protect the interests of the 
United States.
    (f)(1) The contractor shall, not less than 30 days before completion 
of the contractor's

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performance of services on a contract, furnish the Contracting Officer 
with a list of the names of all service employees working under the 
contract and its subcontracts at the time the list is submitted. The 
list shall also contain anniversary dates of employment of each service 
employee under the contract and its predecessor contracts with either 
the current or predecessor contractors or their subcontractors. Where 
changes to the workforce are made after the submission of the certified 
list described in this paragraph (f) (1), the contractor shall, in 
accordance with paragraph (c), not less than 10 days before completion 
of the contractor's performance of services on a contract, furnish the 
Contracting Officer with an updated certified list of the names of all 
service employees employed within the last month of contract 
performance. The updated list shall also contain anniversary dates of 
employment and, where applicable, dates of separation of each service 
employee under the contract and its predecessor contracts with either 
the current or predecessor contractors or their subcontractors. Only 
contractors experiencing a change in their workforce between the 30- and 
10-day periods will have to submit a list in accordance with paragraph 
(c).
    (2) The Contracting Officer shall withhold or cause to be withheld 
from the prime contractor under this or any other Government contract 
with the same prime contractor such sums as an authorized official of 
the Department of Labor requests, upon a determination by the 
Administrator, the Administrative Law Judge, or the Administrative 
Review Board that there has been a failure to comply with the terms of 
this clause and that wages lost as a result of the violations are due to 
employees or that other monetary relief is appropriate. If the 
Contracting Officer or the Administrator, upon final order of the 
Secretary, finds that the contractor has failed to provide a list of the 
names of employees working under the contract, the Contracting Officer 
may in his or her discretion, or upon request by the Administrator, take 
such action as may be necessary to cause the suspension of the payment 
of contract funds until such time as the list is provided to the 
Contracting Officer.
    (g) The contractor and subcontractor shall maintain the following 
records (regardless of format, e.g., paper or electronic, provided the 
records meet the requirements and purposes of this subpart and are fully 
accessible) of its compliance with this clause for not less than a 
period of three years from the date the records were created:
    (1) Copies of any written offers of employment or a contemporaneous 
written record of any oral offers of employment, including the date, 
location, and attendance roster of any employee meeting(s) at which the 
offers were extended, a summary of each meeting, a copy of any written 
notice that may have been distributed, and the names of the employees 
from the predecessor contract to whom an offer was made.
    (2) A copy of any record that forms the basis for any exclusion or 
exemption claimed under this part.
    (3) A copy of the employee list provided to or received from the 
contracting agency.
    (4) An entry on the pay records of the amount of any retroactive 
payment of wages or compensation under the supervision of the 
Administrator of the Wage and Hour Division to each employee, the period 
covered by such payment, and the date of payment, and a copy of any 
receipt form provided by or authorized by the Wage and Hour Division. 
The contractor shall also deliver a copy of the receipt to the employee 
and file the original, as evidence of payment by the contractor and 
receipt by the employee, with the Administrator or an authorized 
representative within 10 days after payment is made.
    (h) The contractor shall cooperate in any review or investigation by 
the contracting agency or the Department of Labor into possible 
violations of the provisions of this clause and shall make records 
requested by such official(s) available for inspection, copying, or 
transcription upon request.
    (i) Disputes concerning the requirements of this clause shall not be 
subject to the general disputes clause of this contract. Such disputes 
shall be resolved in accordance with the procedures of the Department of 
Labor set forth in 29 CFR part 9. Disputes within the meaning of this 
clause include disputes between or among any of the following: the 
contractor, the contracting agency, the U.S. Department of Labor, and 
the employees under the contract or its predecessor contract.



     Sec. Appendix B to Part 9--Notice to Service Contract Employees

    The contract for (insert type of service) services currently 
performed by (insert name of predecessor contractor) has been awarded to 
a new (successor) contractor (insert name of successor contractor). The 
new contractor's first date of performance on the contract will be 
(insert first date of successor contractor's performance). If the work 
is to be performed at the same location, the new contractor is generally 
required to offer employment to the employees who worked on the contract 
during the last 30 days of the current contract, except as follows:
    Employees who will not be laid off or discharged as a result of the 
new contract award are not entitled to an offer of employment.
    Managerial, supervisory, or non-service employees on the current 
contract are not entitled to an offer of employment.

[[Page 177]]

    The new contractor may reduce the size of the current workforce; 
therefore, only a portion of the existing workforce may receive 
employment offers. However, the new contractor must offer employment to 
the displaced employees for which they are qualified if any openings 
occur during the first 90 days of performance on the new contract.
    The new contractor may employ its current employee on the new 
contract before offering employment to the existing contractor's 
employees only if the new contractor's current employee has worked for 
the new contractor for at least 3 months immediately preceding the first 
date of performance on the new contract and would otherwise face layoff 
or discharge if not employed under the new contract.
    Where the new contractor has reason to believe, based on written 
credible information from a knowledgeable source, that an employee's job 
performance while working on the current contract has been unsuitable, 
the employee is not entitled to an offer of employment on the new 
contract.
    An employee hired to work under the current Federal service contract 
and one or more nonfederal service contracts as part of a single job is 
not entitled to an offer of employment on the new contract, provided 
that the existing contractor did not deploy the employee in a manner 
that was designed to avoid the purposes of this part.
    Time limit to accept offer: If you are offered employment on the new 
contract, you will have at least 10 days to accept the offer.
    Complaints: Any employee(s) or authorized employee representative(s) 
of the predecessor contractor who believes that he or she is entitled to 
an offer of employment with the new contractor and who has not received 
an offer, may file a complaint, within 120 days from the first date of 
contract performance, with the Branch of Government Contracts 
Enforcement, Wage and Hour Division, U.S. Department of Labor, 
Washington, DC 20210.
    For additional information: 1-866-4US-WAGE (1-866-487-9243) TTY: 1-
877-889-5627, http://www.wagehour.dol.gov.



PART 10_ESTABLISHING A MINIMUM WAGE FOR CONTRACTORS--Table of Contents



                            Subpart A_General

Sec.
10.1  Purpose and scope.
10.2  Definitions.
10.3  Coverage.
10.4  Exclusions.
10.5  Minimum wage for Federal contractors and subcontractors.
10.6  Antiretaliation.
10.7  Waiver of rights.

                Subpart B_Federal Government Requirements

10.11  Contracting agency requirements.
10.12  Department of Labor requirements.

                    Subpart C_Contractor Requirements

10.21  Contract clause.
10.22  Rate of pay.
10.23  Deductions.
10.24  Overtime payments.
10.25  Frequency of pay.
10.26  Records to be kept by contractors.
10.27  Anti-kickback.
10.28  Tipped employees.
10.29  Notice.

                          Subpart D_Enforcement

10.41  Complaints.
10.42  Wage and Hour Division conciliation.
10.43  Wage and Hour Division investigation.
10.44  Remedies and sanctions.

                  Subpart E_Administrative Proceedings

10.51  Disputes concerning contractor compliance.
10.52  Debarment proceedings.
10.53  Referral to Chief Administrative Law Judge; amendment of 
          pleadings.
10.54  Consent findings and order.
10.55  Proceedings of the Administrative Law Judge.
10.56  Petition for review.
10.57  Administrative Review Board proceedings.
10.58  Administrator ruling.

Appendix A to Part 10--Contract Clause

    Authority: 4 U.S.C. 301; section 4, E.O. 13658, 79 FR 9851; 
Secretary's Order 5--2010, 75 FR 55352.

    Source: 79 FR 60721, Oct. 7, 2014, unless otherwise noted.



                            Subpart A_General



Sec. 10.1  Purpose and scope.

    (a) Purpose. This part contains the Department of Labor's rules 
relating to the administration of Executive Order 13658 (Executive Order 
or the Order), ``Establishing a Minimum Wage for Contractors,'' and 
implements the enforcement provisions of the Executive Order. The 
Executive Order assigns responsibility for investigating potential 
violations of and obtaining compliance with the Executive Order to the 
Department of Labor. The Executive Order states that the Federal 
Government's procurement interests in economy and efficiency are 
promoted when

[[Page 178]]

the Federal Government contracts with sources that adequately compensate 
their workers. There is evidence that raising the pay of low-wage 
workers can increase their morale and productivity and the quality of 
their work, lower turnover and its accompanying costs, and reduce 
supervisory costs. The Executive Order thus states that cost savings and 
quality improvements in the work performed by parties who contract with 
the Federal Government will lead to improved economy and efficiency in 
Government procurement. Executive Order 13658 therefore generally 
requires that the hourly minimum wage paid by contractors to workers 
performing on or in connection with covered contracts with the Federal 
Government shall be at least:
    (1) $10.10 per hour, beginning January 1, 2015; and
    (2) An amount determined by the Secretary of Labor, beginning 
January 1, 2016, and annually thereafter.
    (b) Policy. Executive Order 13658 sets forth a general position of 
the Federal Government that increasing the hourly minimum wage paid by 
Federal contractors to $10.10 will increase efficiency and cost savings 
for the Federal Government. The Executive Order therefore establishes a 
minimum wage requirement for Federal contractors and subcontractors. The 
Order provides that executive departments and agencies shall, to the 
extent permitted by law, ensure that new covered contracts, contract-
like instruments, and solicitations (collectively referred to as 
``contracts'') include a clause, which the contractor and any 
subcontractors shall incorporate into lower-tier subcontracts, 
specifying, as a condition of payment, that the minimum wage to be paid 
to workers, including workers whose wages are calculated pursuant to 
special certificates issued under 29 U.S.C. 214(c), in the performance 
of the contract or any subcontract thereunder, shall be at least:
    (1) $10.10 per hour beginning January 1, 2015; and
    (2) Beginning January 1, 2016, and annually thereafter, an amount 
determined by the Secretary pursuant to the Order. Nothing in Executive 
Order 13658 or this part shall excuse noncompliance with any applicable 
Federal or State prevailing wage law or any applicable law or municipal 
ordinance establishing a minimum wage higher than the minimum wage 
established under the Order.
    (c) Scope. Neither Executive Order 13658 nor this part creates or 
changes any rights under the Contract Disputes Act or any private right 
of action. The Executive Order provides that disputes regarding whether 
a contractor has paid the minimum wages prescribed by the Order, to the 
extent permitted by law, shall be disposed of only as provided by the 
Secretary in regulations issued under the Order. However, nothing in the 
Order or this part is intended to limit or preclude a civil action under 
the False Claims Act, 31 U.S.C. 3730, or criminal prosecution under 18 
U.S.C. 1001. The Order similarly does not preclude judicial review of 
final decisions by the Secretary in accordance with the Administrative 
Procedure Act, 5 U.S.C. 701 et seq.



Sec. 10.2  Definitions.

    For purposes of this part:
    Administrative Review Board (ARB or Board) means the Administrative 
Review Board, U.S. Department of Labor.
    Administrator means the Administrator of the Wage and Hour Division 
and includes any official of the Wage and Hour Division authorized to 
perform any of the functions of the Administrator under this part.
    Agency head means the Secretary, Attorney General, Administrator, 
Governor, Chairperson, or other chief official of an executive agency, 
unless otherwise indicated, including any deputy or assistant chief 
official of an executive agency or any persons authorized to act on 
behalf of the agency head.
    Concessions contract or contract for concessions means 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 the 
principal purpose of which is to furnish food, lodging, automobile fuel, 
souvenirs, newspaper stands, and/or recreational equipment, regardless 
of whether the services are of direct

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benefit to the Government, its personnel, or the general public.
    Contract or contract-like instrument means an agreement between two 
or more parties creating obligations that are enforceable or otherwise 
recognizable at law. This definition includes, but is not limited to, a 
mutually binding legal relationship obligating one party to furnish 
services (including construction) and another party to pay for them. The 
term contract includes all contracts and any subcontracts of any tier 
thereunder, whether negotiated or advertised, including any procurement 
actions, lease agreements, cooperative agreements, provider agreements, 
intergovernmental service agreements, service agreements, licenses, 
permits, or any other type of agreement, regardless of nomenclature, 
type, or particular form, and whether entered into verbally or in 
writing. The term contract shall be interpreted broadly as to include, 
but not be limited to, any contract that may be consistent with the 
definition provided in the Federal Acquisition Regulation (FAR) or 
applicable Federal statutes. This definition includes, but is not 
limited to, any contract that may be covered under any Federal 
procurement statute. Contracts may be the result of competitive bidding 
or awarded to a single source under applicable authority to do so. In 
addition to bilateral instruments, contracts include, but are not 
limited to, awards and notices of awards; job orders or task letters 
issued under basic ordering agreements; letter contracts; orders, such 
as purchase orders, under which the contract becomes effective by 
written acceptance or performance; and bilateral contract modifications. 
The term contract includes contracts covered by the Service Contract 
Act, contracts covered by the Davis-Bacon Act, concessions contracts not 
otherwise subject to the Service Contract Act, and contracts in 
connection with Federal property or land and related to offering 
services for Federal employees, their dependents, or the general public.
    Contracting officer means a person with the authority to enter into, 
administer, and/or terminate contracts and make related determinations 
and findings. This term includes certain authorized representatives of 
the contracting officer acting within the limits of their authority as 
delegated by the contracting officer.
    Contractor means any individual or other legal entity that is 
awarded a Federal Government contract or subcontract under a Federal 
Government contract. The term contractor refers to both a prime 
contractor and all of its subcontractors of any tier on a contract with 
the Federal Government. The term contractor includes lessors and 
lessees, as well as employers of workers performing on covered Federal 
contracts whose wages are calculated pursuant to special certificates 
issued under 29 U.S.C. 214(c). The term employer is used interchangeably 
with the terms contractor and subcontractor in various sections of this 
part. The U.S. Government, its agencies, and instrumentalities are not 
contractors, subcontractors, employers, or joint employers for purposes 
of compliance with the provisions of the Executive Order.
    Davis-Bacon Act means the Davis-Bacon Act of 1931, as amended, 40 
U.S.C. 3141 et seq., and its implementing regulations.
    Executive departments and agencies means executive departments, 
military departments, or any independent establishments within the 
meaning of 5 U.S.C. 101, 102, and 104(1), respectively, and any wholly 
owned Government corporation within the meaning of 31 U.S.C. 9101.
    Executive Order minimum wage means, for purposes of Executive Order 
13658, a wage that is at least:
    (1) $10.10 per hour beginning January 1, 2015; and
    (2) Beginning January 1, 2016, and annually thereafter, an amount 
determined by the Secretary pursuant to section 2 of the Executive 
Order.
    Fair Labor Standards Act (FLSA) means the Fair Labor Standards Act 
of 1938, as amended, 29 U.S.C. 201 et seq., and its implementing 
regulations.
    Federal Government means an agency or instrumentality of the United 
States that enters into a contract pursuant to authority derived from 
the Constitution or the laws of the United States. For purposes of the 
Executive Order and this part, this definition

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does not include the District of Columbia, any Territory or possession 
of the United States, or any independent regulatory agency within the 
meaning of 44 U.S.C. 3502(5).
    Independent agencies means independent regulatory agencies within 
the meaning of 44 U.S.C. 3502(5).
    New contract means a contract that results from a solicitation 
issued on or after January 1, 2015, or a contract that is awarded 
outside the solicitation process on or after January 1, 2015. This term 
includes both new contracts and replacements for expiring contracts. It 
does not apply to the unilateral exercise of a pre-negotiated option to 
renew an existing contract by the Federal Government. For purposes of 
the Executive Order, a contract that is entered into prior to January 1, 
2015 will constitute a new contract if, through bilateral negotiation, 
on or after January 1, 2015:
    (1) The contract is renewed;
    (2) The contract is extended, unless the extension is made pursuant 
to a term in the contract as of December 31, 2014 providing for a short-
term limited extension; or
    (3) The contract is amended pursuant to a modification that is 
outside the scope of the contract.
    Office of Administrative Law Judges means the Office of 
Administrative Law Judges, U.S. Department of Labor.
    Option means a unilateral right in a contract by which, for a 
specified time, the Government may elect to purchase additional supplies 
or services called for by the contract, or may elect to extend the term 
of the contract.
    Procurement contract for construction means a procurement contract 
for the construction, alteration, or repair (including painting and 
decorating) of public buildings or public works and which requires or 
involves the employment of mechanics or laborers, and any subcontract of 
any tier thereunder. The term procurement contract for construction 
includes any contract subject to the provisions of the Davis-Bacon Act, 
as amended, and its implementing regulations.
    Procurement contract for services means a procurement contract the 
principal purpose of which is to furnish services in the United States 
through the use of service employees, and any subcontract of any tier 
thereunder. The term procurement contract for services includes any 
contract subject to the provisions of the Service Contract Act, as 
amended, and its implementing regulations.
    Service Contract Act means the McNamara-O'Hara Service Contract Act 
of 1965, as amended, 41 U.S.C. 6701 et seq., and its implementing 
regulations.
    Solicitation means any request to submit offers, bids, or quotations 
to the Federal Government.
    Tipped employee means any employee engaged in an occupation in which 
he or she customarily and regularly receives more than $30 a month in 
tips. For purposes of the Executive Order, a worker performing on or in 
connection with a contract covered by the Executive Order who meets this 
definition is a tipped employee.
    United States means the United States and all executive departments, 
independent establishments, administrative agencies, and 
instrumentalities of the United States, including corporations of which 
all or substantially all of the stock is owned by the United States, by 
the foregoing departments, establishments, agencies, instrumentalities, 
and including nonappropriated fund instrumentalities. When used in a 
geographic sense, the United States means the 50 States and the District 
of Columbia.
    Wage and Hour Division means the Wage and Hour Division, U.S. 
Department of Labor.
    Wage determination includes any determination of minimum hourly wage 
rates or fringe benefits made by the Secretary of Labor pursuant to the 
provisions of the Service Contract Act or the Davis-Bacon Act. This term 
includes the original determination and any subsequent determinations 
modifying, superseding, correcting, or otherwise changing the provisions 
of the original determination.
    Worker means any person engaged in performing work on or in 
connection with a contract covered by the Executive Order, and whose 
wages under such contract are governed by the Fair Labor Standards Act, 
the Service Contract Act, or the Davis-Bacon Act, other than individuals 
employed in a

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bona fide executive, administrative, or professional capacity, as those 
terms are defined in 29 CFR part 541, regardless of the contractual 
relationship alleged to exist between the individual and the employer. 
The term worker includes workers performing on or in connection with a 
covered contract whose wages are calculated pursuant to special 
certificates issued under 29 U.S.C. 214(c), as well as any person 
working on or in connection with a covered contract and individually 
registered in a bona fide apprenticeship or training program registered 
with the U.S. Department of Labor's Employment and Training 
Administration, Office of Apprenticeship, or with a State Apprenticeship 
Agency recognized by the Office of Apprenticeship.



Sec. 10.3  Coverage.

    (a) This part applies to any new contract with the Federal 
Government, unless excluded by Sec. 10.4, provided that:
    (1)(i) It is a procurement contract for construction covered by the 
Davis-Bacon Act;
    (ii) It is a contract for services covered by the Service Contract 
Act;
    (iii) It is a contract for concessions, including any concessions 
contract excluded from coverage under the Service Contract Act by 
Department of Labor regulations at 29 CFR 4.133(b); or
    (iv) It is a contract entered into with the Federal Government in 
connection with Federal property or lands and related to offering 
services for Federal employees, their dependents, or the general public; 
and
    (2) The wages of workers under such contract are governed by the 
Fair Labor Standards Act, the Service Contract Act, or the Davis-Bacon 
Act.
    (b) For contracts covered by the Service Contract Act or the Davis-
Bacon Act, this part applies to prime contracts only at the thresholds 
specified in those statutes. For procurement contracts where workers' 
wages are governed by the Fair Labor Standards Act, this part applies 
when the prime contract exceeds the micro-purchase threshold, as defined 
in 41 U.S.C. 1902(a).
    (c) This part only applies to contracts with the Federal Government 
requiring performance in whole or in part within the United States. If a 
contract with the Federal Government is to be performed in part within 
and in part outside the United States and is otherwise covered by the 
Executive Order and this part, the minimum wage requirements of the 
Order and this part would apply with respect to that part of the 
contract that is performed within the United States.
    (d) This part does not apply to contracts for the manufacturing or 
furnishing of materials, supplies, articles, or equipment to the Federal 
Government that are subject to the Walsh-Healey Public Contracts Act, 41 
U.S.C. 6501 et seq.



Sec. 10.4  Exclusions.

    (a) Grants. The requirements of this part do not apply to grants 
within the meaning of the Federal Grant and Cooperative Agreement Act, 
as amended, 31 U.S.C. 6301 et seq.
    (b) Contracts and agreements with and grants to Indian Tribes. This 
part does not apply to contracts and agreements with and grants to 
Indian Tribes under the Indian Self-Determination and Education 
Assistance Act, as amended, 25 U.S.C. 450 et seq.
    (c) Procurement contracts for construction that are excluded from 
coverage of the Davis-Bacon Act. Procurement contracts for construction 
that are not covered by the Davis-Bacon Act are not subject to this 
part.
    (d) Contracts for services that are exempted from coverage under the 
Service Contract Act. Service contracts, except for those expressly 
covered by Sec. 10.3(a)(1)(iii) or (iv), that are exempt from coverage 
of the Service Contract Act pursuant to its statutory language at 41 
U.S.C. 6702(b) or its implementing regulations, including those at 29 
CFR 4.115 through 4.122 and 29 CFR 4.123(d) and(e), are not subject to 
this part.
    (e) Employees who are exempt from the minimum wage requirements of 
the Fair Labor Standards Act under 29 U.S.C. 213(a) and 214(a)-(b). 
Except for workers who are otherwise covered by the Davis-Bacon Act or 
the Service Contract Act, this part does not apply to employees who are 
not entitled to the minimum wage set forth at 29 U.S.C. 206(a)(1) of the 
Fair Labor Standards Act pursuant to 29 U.S.C. 213(a) and

[[Page 182]]

214(a)-(b). Pursuant to this exclusion, individuals that are not subject 
to the requirements of this part include but are not limited to:
    (1) Learners, apprentices, or messengers. This part does not apply 
to learners, apprentices, or messengers whose wages are calculated 
pursuant to special certificates issued under 29 U.S.C. 214(a).
    (2) Students. This part does not apply to student workers whose 
wages are calculated pursuant to special certificates issued under 29 
U.S.C. 214(b).
    (3) Individuals employed in a bona fide executive, administrative, 
or professional capacity. This part does not apply to workers who are 
employed by Federal contractors in a bona fide executive, 
administrative, or professional capacity, as those terms are defined and 
delimited in 29 CFR part 541.
    (f) FLSA-covered workers performing in connection with covered 
contracts for less than 20 percent of their work hours in a given 
workweek. This part does not apply to FLSA-covered workers performing in 
connection with covered contracts, i.e., those workers who perform work 
duties necessary to the performance of the contract but who are not 
directly engaged in performing the specific work called for by the 
contract, that spend less than 20 percent of their hours worked in a 
particular workweek performing in connection with such contracts. This 
exclusion is inapplicable to covered workers performing on covered 
contracts, i.e., those workers directly engaged in performing the 
specific work called for by the contract.



Sec. 10.5  Minimum wage for Federal contractors and subcontractors.

    (a) General. Pursuant to Executive Order 13658, the minimum hourly 
wage rate required to be paid to workers performing on or in connection 
with covered contracts with the Federal Government is at least:
    (1) $10.10 per hour beginning January 1, 2015; and
    (2) Beginning January 1, 2016, and annually thereafter, an amount 
determined by the Secretary pursuant to section 2 of Executive Order 
13658. In accordance with section 2 of the Order, the Secretary will 
determine the applicable minimum wage rate to be paid to workers on 
covered contracts on an annual basis beginning at least 90 days before 
any new minimum wage is to take effect.
    (b) Method for determining the applicable Executive Order minimum 
wage for workers. The minimum wage to be paid to workers, including 
workers whose wages are calculated pursuant to special certificates 
issued under 29 U.S.C. 214(c), in the performance of a covered contract 
shall be at least:
    (1) $10.10 per hour beginning January 1, 2015; and
    (2) An amount determined by the Secretary, beginning January 1, 
2016, and annually thereafter. The applicable minimum wage determined 
for each calendar year by the Secretary shall be:
    (i) Not less than the amount in effect on the date of such 
determination;
    (ii) Increased from such amount by the annual percentage increase in 
the Consumer Price Index for Urban Wage Earners and Clerical Workers 
(United States city average, all items, not seasonally adjusted), or its 
successor publication, as determined by the Bureau of Labor Statistics; 
and
    (iii) Rounded to the nearest multiple of $0.05. In calculating the 
annual percentage increase in the Consumer Price Index for purposes of 
this section, the Secretary shall compare such Consumer Price Index for 
the most recent year available with the Consumer Price Index for the 
preceding year.
    (c) Relation to other laws. Nothing in the Executive Order or this 
part shall excuse noncompliance with any applicable Federal or State 
prevailing wage law or any applicable law or municipal ordinance 
establishing a minimum wage higher than the minimum wage established 
under the Executive Order and this part.



Sec. 10.6  Antiretaliation.

    It shall be unlawful for any person to discharge or in any other 
manner discriminate against any worker because such worker has filed any 
complaint or instituted or caused to be instituted any proceeding under 
or related to Executive Order 13658 or this part, or has testified or is 
about to testify in any such proceeding.

[[Page 183]]



Sec. 10.7  Waiver of rights.

    Workers cannot waive, nor may contractors induce workers to waive, 
their rights under Executive Order 13658 or this part.



                Subpart B_Federal Government Requirements



Sec. 10.11  Contracting agency requirements.

    (a) Contract clause. The contracting agency shall include the 
Executive Order minimum wage contract clause set forth in appendix A of 
this part in all covered contracts and solicitations for such contracts, 
as described in Sec. 10.3, except for procurement contracts subject to 
the FAR. The required contract clause directs, as a condition of 
payment, that all workers performing work on or in connection with 
covered contracts must be paid the applicable, currently effective 
minimum wage under Executive Order 13658 and Sec. 10.5. For procurement 
contracts subject to the FAR, contracting agencies must use the clause 
set forth in the FAR developed to implement this rule. Such clause will 
accomplish the same purposes as the clause set forth in Appendix A and 
be consistent with the requirements set forth in this rule.
    (b) Failure to include the contract clause. Where the Department or 
the contracting agency discovers or determines, whether before or 
subsequent to a contract award, that a contracting agency made an 
erroneous determination that Executive Order 13658 or this part did not 
apply to a particular contract and/or failed to include the applicable 
contract clause in a contract to which the Executive Order applies, the 
contracting agency, on its own initiative or within 15 calendar days of 
notification by an authorized representative of the Department of Labor, 
shall incorporate the contract clause in the contract retroactive to 
commencement of performance under the contract through the exercise of 
any and all authority that may be needed (including, where necessary, 
its authority to negotiate or amend, its authority to pay any necessary 
additional costs, and its authority under any contract provision 
authorizing changes, cancellation and termination).
    (c) Withholding. A contracting officer shall upon his or her own 
action or upon written request of an authorized representative of the 
Department of Labor withhold or cause to be withheld from the prime 
contractor under the covered contract or any other Federal contract with 
the same prime contractor, so much of the accrued payments or advances 
as may be considered necessary to pay workers the full amount of wages 
required by the Executive Order. In the event of failure to pay any 
covered workers all or part of the wages due under Executive Order 
13658, the agency may, after authorization or by direction of the 
Department of Labor and written notification to the contractor, take 
action to cause suspension of any further payment or advance of funds 
until such violations have ceased. Additionally, any failure to comply 
with the requirements of Executive Order 13658 may be grounds for 
termination of the right to proceed with the contract work. In such 
event, the contracting agency may enter into other contracts or 
arrangements for completion of the work, charging the contractor in 
default with any additional cost.
    (d) Actions on complaints--(1) Reporting--(i) Reporting time frame. 
The contracting agency shall forward all information listed in paragraph 
(d)(1)(ii) of this section to the Branch of Government Contracts 
Enforcement, Wage and Hour Division, U.S. Department of Labor, 
Washington, DC 20210 within 14 calendar days of receipt of a complaint 
alleging contractor noncompliance with the Executive Order or this part 
or within 14 calendar days of being contacted by the Wage and Hour 
Division regarding any such complaint.
    (ii) Report contents. The contracting agency shall forward to the 
Branch of Government Contracts Enforcement, Wage and Hour Division, U.S. 
Department of Labor, Washington, DC 20210 any:
    (A) Complaint of contractor noncompliance with Executive Order 13658 
or this part;
    (B) Available statements by the worker, contractor, or any other 
person regarding the alleged violation;

[[Page 184]]

    (C) Evidence that the Executive Order minimum wage contract clause 
was included in the contract;
    (D) Information concerning known settlement negotiations between the 
parties, if applicable; and
    (E) Any other relevant facts known to the contracting agency or 
other information requested by the Wage and Hour Division.
    (2) [Reserved]



Sec. 10.12  Department of Labor requirements.

    (a) In general. The Executive Order minimum wage applicable from 
January 1, 2015 through December 31, 2015 is $10.10 per hour. The 
Secretary will determine the applicable minimum wage rate to be paid to 
workers performing work on or in connection with covered contracts on an 
annual basis, beginning January 1, 2016.
    (b) Method for determining the applicable Executive Order minimum 
wage. The Secretary will determine the applicable minimum wage under the 
Executive Order, beginning January 1, 2016, by using the methodology set 
forth in Sec. 10.5(b).
    (c) Notice. (1) The Administrator will notify the public of the 
applicable minimum wage rate to be paid to workers performing work on or 
in connection with covered contracts on an annual basis at least 90 days 
before any new minimum wage is to take effect.
    (2) Method of notification--(i) Federal Register. The Administrator 
will publish a notice in the Federal Register stating the applicable 
minimum wage rate to be paid to workers performing work on or in 
connection with covered contracts on an annual basis at least 90 days 
before any new minimum wage is to take effect.
    (ii) Wage Determinations OnLine Web site. The Administrator will 
publish and maintain on Wage Determinations OnLine (WDOL), http://
www.wdol.gov, or any successor site, the applicable minimum wage rate to 
be paid to workers performing work on or in connection with covered 
contracts.
    (iii) Wage Determinations. The Administrator will publish a 
prominent general notice on all wage determinations issued under the 
Davis-Bacon Act and the Service Contract Act stating the Executive Order 
minimum wage and that the Executive Order minimum wage applies to all 
workers performing on or in connection with such contracts whose wages 
are governed by the Fair Labor Standards Act, the Davis-Bacon Act, and 
the Service Contract Act. The Administrator will update this general 
notice on all such wage determinations annually.
    (iv) Other means as appropriate. The Administrator may publish the 
applicable minimum wage rate to be paid to workers performing work on or 
in connection with covered contracts on an annual basis at least 90 days 
before any such new minimum wage is to take effect in any other media 
that the Administrator deems appropriate.
    (d) Notification to a contractor of the withholding of funds. If the 
Administrator requests that a contracting agency withhold funds from a 
contractor pursuant to Sec. 10.11(c), the Administrator and/or 
contracting agency shall notify the affected prime contractor of the 
Administrator's withholding request to the contracting agency.



                    Subpart C_Contractor Requirements



Sec. 10.21  Contract clause.

    (a) Contract clause. The contractor, as a condition of payment, 
shall abide by the terms of the applicable Executive Order minimum wage 
contract clause referred to in Sec. 10.11(a).
    (b) The contractor and any subcontractors shall include in any 
covered subcontracts the Executive Order minimum wage contract clause 
referred to in Sec. 10.11(a) and shall require, as a condition of 
payment, that the subcontractor include the minimum wage contract clause 
in any lower-tier subcontracts. The prime contractor and any upper-tier 
contractor shall be responsible for the compliance by any subcontractor 
or lower-tier subcontractor with the Executive Order minimum wage 
requirements, whether or not the contract clause was included in the 
subcontract.



Sec. 10.22  Rate of pay.

    (a) General. The contractor must pay each worker performing work on 
or in

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connection with a covered contract no less than the applicable Executive 
Order minimum wage for all hours worked on or in connection with the 
covered contract, unless such worker is exempt under Sec. 10.4 of this 
part. In determining whether a worker is performing within the scope of 
a covered contract, all workers who, on or after the date of award, are 
engaged in working on or in connection with the contract, either in 
performing the specific services called for by its terms or in 
performing other duties necessary to the performance of the contract, 
are thus subject to the Executive Order and this part unless a specific 
exemption is applicable. Nothing in the Executive Order or these 
regulations shall excuse noncompliance with any applicable Federal or 
State prevailing wage law or any applicable law or municipal ordinance 
establishing a minimum wage higher than the minimum wage established 
under Executive Order 13658.
    (b) Workers who receive fringe benefits. The contractor may not 
discharge any part of its minimum wage obligation under the Executive 
Order by furnishing fringe benefits or, with respect to workers whose 
wages are governed by the Service Contract Act, the cash equivalent 
thereof.
    (c) Tipped employees. The contractor may satisfy the wage payment 
obligation to a tipped employee under the Executive Order through a 
combination of an hourly cash wage and a credit based on tips received 
by such employee pursuant to the provisions in Sec. 10.28.



Sec. 10.23  Deductions.

    The contractor may make deductions that reduce a worker's wages 
below the Executive Order minimum wage rate only if such deduction 
qualifies as a:
    (a) Deduction required by Federal, State, or local law, such as 
Federal or State withholding of income taxes;
    (b) Deduction for payments made to third parties pursuant to court 
order;
    (c) Deduction directed by a voluntary assignment of the worker or 
his or her authorized representative; or
    (d) Deduction for the reasonable cost or fair value, as determined 
by the Administrator, of furnishing such worker with ``board, lodging, 
or other facilities,'' as defined in 29 U.S.C. 203(m) and part 531 of 
this title.



Sec. 10.24  Overtime payments.

    (a) General. The Fair Labor Standards Act and the Contract Work 
Hours and Safety Standards Act require overtime payment of not less than 
one and one-half times the regular rate of pay or basic rate of pay for 
all hours worked over 40 hours in a workweek to covered workers. The 
regular rate of pay under the Fair Labor Standards Act is generally 
determined by dividing the worker's total earnings in any workweek by 
the total number of hours actually worked by the worker in that workweek 
for which such compensation was paid.
    (b) Tipped employees. When overtime is worked by tipped employees 
who are entitled to overtime pay under the Fair Labor Standards Act and/
or the Contract Work Hours and Safety Standards Act, the employees' 
regular rate of pay includes both the cash wages paid by the employer 
(see Secs. 10.22(a) and 10.28(a)(1)) and the amount of any tip credit 
taken (see Sec. 10.28(a)(2)). (See part 778 of this title for a detailed 
discussion of overtime compensation under the Fair Labor Standards Act.) 
Any tips received by the employee in excess of the tip credit are not 
included in the regular rate.



Sec. 10.25  Frequency of pay.

    Wage payments to workers shall be made no later than one pay period 
following the end of the regular pay period in which such wages were 
earned or accrued. A pay period under Executive Order 13658 may not be 
of any duration longer than semi-monthly.



Sec. 10.26  Records to be kept by contractors.

    (a) The contractor and each subcontractor performing work subject to 
Executive Order 13658 shall make and maintain, for three years, records 
containing the information specified in paragraphs (a)(1) through (6) of 
this section for each worker and shall make them available for 
inspection and transcription by authorized representatives of the Wage 
and Hour Division of the U.S. Department of Labor:

[[Page 186]]

    (1) Name, address, and social security number of each worker;
    (2) The worker's occupation(s) or classification(s);
    (3) The rate or rates of wages paid;
    (4) The number of daily and weekly hours worked by each worker;
    (5) Any deductions made; and
    (6) The total wages paid.
    (b) The contractor shall permit authorized representatives of the 
Wage and Hour Division to conduct interviews with workers at the 
worksite during normal working hours.
    (c) Nothing in this part limits or otherwise modifies the 
contractor's recordkeeping obligations, if any, under the Davis-Bacon 
Act, the Service Contract Act, or the Fair Labor Standards Act, or their 
implementing regulations.



Sec. 10.27  Anti-kickback.

    All wages paid to workers performing on or in connection with 
covered contracts must be paid free and clear and without subsequent 
deduction (except as set forth in Sec. 10.23), rebate, or kickback on 
any account. Kickbacks directly or indirectly to the employer or to 
another person for the employer's benefit for the whole or part of the 
wage are prohibited.



Sec. 10.28  Tipped employees.

    (a) Payment of wages to tipped employees. With respect to workers 
who are tipped employees as defined in Sec. 10.2 and this section, the 
amount of wages paid to such employee by the employee's employer shall 
be equal to:
    (1) An hourly cash wage of at least:
    (i) $4.90 an hour beginning on January 1, 2015;
    (ii) For each succeeding 1-year period until the hourly cash wage 
equals 70 percent of the wage in effect under section 2 of the Executive 
Order, the hourly cash wage applicable in the prior year, increased by 
the lesser of $0.95 or the amount necessary for the hourly cash wage to 
equal 70 percent of the wage in effect under section 2 of the Executive 
Order;
    (iii) For each subsequent year, 70 percent of the wage in effect 
under section 2 of the Executive Order for such year rounded to the 
nearest multiple of $0.05; and
    (2) An additional amount on account of the tips received by such 
employee (tip credit) which amount is equal to the difference between 
the hourly cash wage in paragraph (a)(1) of this section and the wage in 
effect under section 2 of the Executive Order. Where tipped employees do 
not receive a sufficient amount of tips in the workweek to equal the 
amount of the tip credit, the employer must increase the cash wage paid 
for the workweek under paragraph (a)(1) of this section so that the 
amount of the cash wage paid and the tips received by the employee equal 
the minimum wage under section 2 of the Executive Order.
    (3) An employer may pay a higher cash wage than required by 
paragraph (a)(1) of this section and take a lower tip credit but may not 
pay a lower cash wage than required by paragraph (a)(1) of this section 
and take a greater tip credit. In order for the employer to claim a tip 
credit, the employer must demonstrate that the worker received at least 
the amount of the credit claimed in actual tips. If the worker received 
less than the claimed tip credit amount in tips during the workweek, the 
employer is required to pay the balance on the regular payday so that 
the worker receives the wage in effect under section 2 of the Executive 
Order with the defined combination of wages and tips.
    (4) If the wage required to be paid under the Service Contract Act, 
41 U.S.C. 6701 et seq., or any other applicable law or regulation is 
higher than the wage required by section 2 of the Executive Order, the 
employer shall pay additional cash wages equal to the difference between 
the wage in effect under section 2 of the Executive Order and the 
highest wage required to be paid.
    (b) Tipped employees. (1) As provided in Sec. 10.2, a covered worker 
employed in an occupation in which he or she receives tips is a ``tipped 
employee'' when he or she customarily and regularly receives more than 
$30 a month in tips. Only tips actually retained by the employee after 
any tip pooling may be counted in determining whether the person is a 
``tipped employee'' and in applying the provisions of section 3 of the 
Executive Order. An employee may

[[Page 187]]

be a ``tipped employee'' regardless of whether the employee is employed 
full time or part time so long as the employee customarily and regularly 
receives more than $30 a month in tips. An employee who does not receive 
more than $30 a month in tips customarily and regularly is not a tipped 
employee for purposes of the Executive Order and must receive the full 
minimum wage in section 2 of the Executive Order without any credit for 
tips received under the provisions of section 3.
    (2) Dual jobs. In some situations an employee is employed in a 
tipped occupation and a non-tipped occupation (dual jobs), as for 
example, where a maintenance person in a hotel also works as a server. 
In such a situation if the employee customarily and regularly receives 
at least $30 a month in tips for the work as a server, the employee is a 
tipped employee only when working as a server. The tip credit can only 
be taken for the hours spent in the tipped occupation and no tip credit 
can be taken for the hours of employment in the non-tipped occupation. 
Such a situation is distinguishable from that of a tipped employee 
performing incidental duties that are related to the tipped occupation 
but that are not directed toward producing tips, for example when a 
server spends part of his or her time cleaning and setting tables, 
toasting bread, making coffee and occasionally washing dishes or 
glasses. Related duties may not comprise more than 20 percent of the 
hours worked in the tipped occupation in a workweek.
    (c) Characteristics of tips. A tip is a sum presented by a customer 
as a gift or gratuity in recognition of some service performed for the 
customer. It is to be distinguished from payment of a fixed charge, if 
any, made for the service. Whether a tip is to be given, and its amount, 
are matters determined solely by the customer. Tips are the property of 
the employee whether or not the employer has taken a tip credit. The 
employer is prohibited from using an employee's tips, whether or not it 
has taken a tip credit, for any reason other than as a credit against 
its minimum wage obligations under the Executive Order to the employee, 
or in furtherance of a valid tip pool. An employer and employee cannot 
agree to waive the workers right to retain his or her tips. Customers 
may present cash tips directly to the employee or may designate a tip 
amount to be added to their bill when paying with a credit card or by 
other electronic means. Special gifts in forms other than money or its 
equivalent such as theater tickets, passes, or merchandise, are not 
counted as tips received by the employee for purposes of determining 
wages paid under the Executive Order.
    (d) Service charges. (1) A compulsory charge for service, such as 15 
percent of the amount of the bill, imposed on a customer by an 
employer's establishment, is not a tip and, even if distributed by the 
employer to its workers, cannot be counted as a tip for purposes of 
determining if the worker is a tipped employee. Similarly, where 
negotiations between a hotel and a customer for banquet facilities 
include amounts for distribution to workers of the hotel, the amounts so 
distributed are not tips.
    (2) As stated above, service charges and other similar sums are 
considered to be part of the employer's gross receipts and are not tips 
for the purposes of the Executive Order. Where such sums are distributed 
by the employer to its workers, however, they may be used in their 
entirety to satisfy the wage payment requirements of the Executive 
Order.
    (e) Tip pooling. Where tipped employees share tips through a tip 
pool, only the amounts retained by the tipped employees after any 
redistribution through a tip pool are considered tips in applying the 
provisions of FLSA section 3(t) and the wage payment provisions of 
section 3 of the Executive Order. There is no maximum contribution 
percentage on valid mandatory tip pools, which can only include tipped 
employees. However, an employer must notify its employees of any 
required tip pool contribution amount, may only take a tip credit for 
the amount of tips each employee ultimately receives, and may not retain 
any of the employees' tips for any other purpose.

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    (f) Notice. An employer is not eligible to take the tip credit 
unless it has informed its tipped employees in advance of the employer's 
use of the tip credit. The employer must inform the tipped employee of 
the amount of the cash wage that is to be paid by the employer, which 
cannot be lower than the cash wage required by paragraph (a)(1) of this 
section; the additional amount by which the wages of the tipped employee 
will be considered increased on account of the tip credit claimed by the 
employer, which amount may not exceed the value of the tips actually 
received by the employee; that all tips received by the tipped employee 
must be retained by the employee except for a valid tip pooling 
arrangement limited to tipped employees; and that the tip credit shall 
not apply to any worker who has not been informed of these requirements 
in this section.



Sec. 10.29  Notice.

    (a) The contractor must notify all workers performing work on or in 
connection with a covered contract of the applicable minimum wage rate 
under the Executive Order. With respect to service employees on 
contracts covered by the Service Contract Act and laborers and mechanics 
on contracts covered by the Davis-Bacon Act, the contractor may meet 
this requirement by posting, in a prominent and accessible place at the 
worksite, the applicable wage determination under those statutes.
    (b) With respect to workers performing work on or in connection with 
a covered contract whose wages are governed by the FLSA, the contractor 
must post a notice provided by the Department of Labor in a prominent 
and accessible place at the worksite so it may be readily seen by 
workers.
    (c) Contractors that customarily post notices to workers 
electronically may post the notice electronically, provided such 
electronic posting is displayed prominently on any Web site that is 
maintained by the contractor, whether external or internal, and 
customarily used for notices to workers about terms and conditions of 
employment.



                          Subpart D_Enforcement



Sec. 10.41  Complaints.

    (a) Any worker, contractor, labor organization, trade organization, 
contracting agency, or other person or entity that believes a violation 
of the Executive Order or this part has occurred may file a complaint 
with any office of the Wage and Hour Division. No particular form of 
complaint is required. A complaint may be filed orally or in writing. If 
the complainant is unable to file the complaint in English, the Wage and 
Hour Division will accept the complaint in any language.
    (b) It is the policy of the Department of Labor to protect the 
identity of its confidential sources and to prevent an unwarranted 
invasion of personal privacy. Accordingly, the identity of any 
individual who makes a written or oral statement as a complaint or in 
the course of an investigation, as well as portions of the statement 
which would reveal the individual's identity, shall not be disclosed in 
any manner to anyone other than Federal officials without the prior 
consent of the individual. Disclosure of such statements shall be 
governed by the provisions of the Freedom of Information Act (5 U.S.C. 
552, see 29 CFR part 70) and the Privacy Act of 1974 (5 U.S.C. 552a).



Sec. 10.42  Wage and Hour Division conciliation.

    After receipt of a complaint, the Administrator may seek to resolve 
the matter through conciliation.



Sec. 10.43  Wage and Hour Division investigation.

    The Administrator may investigate possible violations of the 
Executive Order or this part either as the result of a complaint or at 
any time on his or her own initiative. As part of the investigation, the 
Administrator may conduct interviews with the relevant contractor, as 
well as the contractor's workers at the worksite during normal work 
hours; inspect the relevant contractor's records (including contract 
documents and payrolls, if applicable); make copies and transcriptions 
of such records; and require the production of any documentary or other 
evidence the

[[Page 189]]

Administrator deems necessary to determine whether a violation, 
including conduct warranting imposition of debarment, has occurred. 
Federal agencies and contractors shall cooperate with any authorized 
representative of the Department of Labor in the inspection of records, 
in interviews with workers, and in all aspects of investigations.



Sec. 10.44  Remedies and sanctions.

    (a) Unpaid wages. When the Administrator determines a contractor has 
failed to pay the applicable Executive Order minimum wage to workers, 
the Administrator will notify the contractor and the applicable 
contracting agency of the unpaid wage violation and request the 
contractor to remedy the violation. If the contractor does not remedy 
the violation of the Executive Order or this part, the Administrator 
shall direct the contractor to pay all unpaid wages to the affected 
workers in the investigative findings letter it issues pursuant to 
Sec. 10.51. The Administrator may additionally direct that payments due 
on the contract or any other contract between the contractor and the 
Government be withheld as necessary to pay unpaid wages. Upon the final 
order of the Secretary that unpaid wages are due, the Administrator may 
direct the relevant contracting agency to transfer the withheld funds to 
the Department of Labor for disbursement.
    (b) Antiretaliation. When the Administrator determines that any 
person has discharged or in any other manner retaliated against any 
worker because such worker filed any complaint or instituted or caused 
to be instituted any proceeding under or related to the Executive Order 
or this part, or because such worker testified or is about to testify in 
any such proceeding, the Administrator may provide for any relief to the 
worker as may be appropriate, including employment, reinstatement, 
promotion, and the payment of lost wages.
    (c) Debarment. Whenever a contractor is found by the Secretary of 
Labor to have disregarded its obligations under the Executive Order, or 
this part, such contractor and its responsible officers, and any firm, 
corporation, partnership, or association in which the contractor or 
responsible officers have an interest, shall be ineligible to be awarded 
any contract or subcontract subject to the Executive Order for a period 
of up to three years from the date of publication of the name of the 
contractor or responsible officer on the ineligible list. Neither an 
order for debarment of any contractor or its responsible officers from 
further Government contracts nor the inclusion of a contractor or its 
responsible officers on a published list of noncomplying contractors 
under this section shall be carried out without affording the contractor 
or responsible officers an opportunity for a hearing before an 
Administrative Law Judge.
    (d) Civil action to recover greater underpayments than those 
withheld. If the payments withheld under Sec. 10.11(c) are insufficient 
to reimburse all workers' lost wages, or if there are no payments to 
withhold, the Department of Labor, following a final order of the 
Secretary, may bring action against the contractor in any court of 
competent jurisdiction to recover the remaining amount of underpayments. 
The Department of Labor shall, to the extent possible, pay any sums it 
recovers in this manner directly to the underpaid workers. Any sum not 
paid to a worker because of inability to do so within three years shall 
be transferred into the Treasury of the United States as miscellaneous 
receipts.
    (e) Retroactive inclusion of contract clause. If a contracting 
agency fails to include the applicable contract clause in a contract to 
which the Executive Order applies, the contracting agency, on its own 
initiative or within 15 calendar days of notification by an authorized 
representative of the Department of Labor, shall incorporate the 
contract clause in the contract retroactive to commencement of 
performance under the contract through the exercise of any and all 
authority that may be needed (including, where necessary, its authority 
to negotiate or amend, its authority to pay any necessary additional 
costs, and its authority under any contract provision authorizing 
changes, cancellation and termination).

[[Page 190]]



                  Subpart E_Administrative Proceedings



Sec. 10.51  Disputes concerning contractor compliance.

    (a) This section sets forth the procedure for resolution of disputes 
of fact or law concerning a contractor's compliance with subpart C of 
this part. The procedures in this section may be initiated upon the 
Administrator's own motion or upon request of the contractor.
    (b)(1) In the event of a dispute described in paragraph (a) of this 
section in which it appears that relevant facts are at issue, the 
Administrator will notify the affected contractor(s) and the prime 
contractor (if different) of the investigative findings by certified 
mail to the last known address.
    (2) A contractor desiring a hearing concerning the Administrator's 
investigative findings letter shall request such a hearing by letter 
postmarked within 30 calendar days of the date of the Administrator's 
letter. The request shall set forth those findings which are in dispute 
with respect to the violations and/or debarment, as appropriate, and 
explain how the findings are in dispute, including by making reference 
to any affirmative defenses.
    (3) Upon receipt of a timely request for a hearing, the 
Administrator shall refer the case to the Chief Administrative Law Judge 
by Order of Reference, to which shall be attached a copy of the 
investigative findings letter from the Administrator and response 
thereto, for designation to an Administrative Law Judge to conduct such 
hearings as may be necessary to resolve the disputed matters. The 
hearing shall be conducted in accordance with the procedures set forth 
in 29 CFR part 6.
    (c)(1) In the event of a dispute described in paragraph (a) of this 
section in which it appears that there are no relevant facts at issue, 
and where there is not at that time reasonable cause to institute 
debarment proceedings under Sec. 10.52, the Administrator shall notify 
the contractor(s) of the investigation findings by certified mail to the 
last known address, and shall issue a ruling in the investigative 
findings letter on any issues of law known to be in dispute.
    (2)(i) If the contractor disagrees with the factual findings of the 
Administrator or believes that there are relevant facts in dispute, the 
contractor shall so advise the Administrator by letter postmarked within 
30 calendar days of the date of the Administrator's letter. In the 
response, the contractor shall explain in detail the facts alleged to be 
in dispute and attach any supporting documentation.
    (ii) Upon receipt of a timely response under paragraph (c)(2)(i) of 
this section alleging the existence of a factual dispute, the 
Administrator shall examine the information submitted. If the 
Administrator determines that there is a relevant issue of fact, the 
Administrator shall refer the case to the Chief Administrative Law Judge 
in accordance with paragraph (b)(3) of this section. If the 
Administrator determines that there is no relevant issue of fact, the 
Administrator shall so rule and advise the contractor accordingly.
    (3) If the contractor desires review of the ruling issued by the 
Administrator under paragraph (c)(1) or (c)(2)(ii) of this section, the 
contractor shall file a petition for review thereof with the 
Administrative Review Board postmarked within 30 calendar days of the 
date of the ruling, with a copy thereof to the Administrator. The 
petition for review shall be filed in accordance with the procedures set 
forth in 29 CFR part 7.
    (d) If a timely response to the Administrator's investigative 
findings letter is not made or a timely petition for review is not 
filed, the Administrator's investigative findings letter shall become 
the final order of the Secretary. If a timely response or petition for 
review is filed, the Administrator's letter shall be inoperative unless 
and until the decision is upheld by the Administrative Law Judge or the 
Administrative Review Board, or otherwise becomes a final order of the 
Secretary.



Sec. 10.52  Debarment proceedings.

    (a) Whenever any contractor is found by the Secretary of Labor to 
have disregarded its obligations to workers or subcontractors under 
Executive Order 13658 or this part, such contractor and its responsible 
officers, and any firm,

[[Page 191]]

corporation, partnership, or association in which such contractor or 
responsible officers have an interest, shall be ineligible for a period 
of up to three years to receive any contracts or subcontracts subject to 
Executive Order 13658 from the date of publication of the name or names 
of the contractor or persons on the ineligible list.
    (b)(1) Whenever the Administrator finds reasonable cause to believe 
that a contractor has committed a violation of Executive Order 13658 or 
this part which constitutes a disregard of its obligations to workers or 
subcontractors, the Administrator shall notify by certified mail to the 
last known address, the contractor and its responsible officers (and any 
firms, corporations, partnerships, or associations in which the 
contractor or responsible officers are known to have an interest), of 
the finding. The Administrator shall afford such contractor and any 
other parties notified an opportunity for a hearing as to whether 
debarment action should be taken under Executive Order 13658 or this 
part. The Administrator shall furnish to those notified a summary of the 
investigative findings. If the contractor or any other parties notified 
wish to request a hearing as to whether debarment action should be 
taken, such a request shall be made by letter to the Administrator 
postmarked within 30 calendar days of the date of the investigative 
findings letter from the Administrator, and shall set forth any findings 
which are in dispute and the reasons therefor, including any affirmative 
defenses to be raised. Upon receipt of such timely request for a 
hearing, the Administrator shall refer the case to the Chief 
Administrative Law Judge by Order of Reference, to which shall be 
attached a copy of the investigative findings letter from the 
Administrator and the response thereto, for designation of an 
Administrative Law Judge to conduct such hearings as may be necessary to 
determine the matters in dispute.
    (2) Hearings under this section shall be conducted in accordance 
with the procedures set forth in 29 CFR part 6. If no hearing is 
requested within 30 calendar days of the letter from the Administrator, 
the Administrator's findings shall become the final order of the 
Secretary.



Sec. 10.53  Referral to Chief Administrative Law Judge; amendment
of pleadings.

    (a) Upon receipt of a timely request for a hearing under Sec. 10.51 
(where the Administrator has determined that relevant facts are in 
dispute) or Sec. 10.52 (debarment), the Administrator shall refer the 
case to the Chief Administrative Law Judge by Order of Reference, to 
which shall be attached a copy of the investigative findings letter from 
the Administrator and response thereto, for designation of an 
Administrative Law Judge to conduct such hearings as may be necessary to 
decide the disputed matters. A copy of the Order of Reference and 
attachments thereto shall be served upon the respondent. The 
investigative findings letter from the Administrator and response 
thereto shall be given the effect of a complaint and answer, 
respectively, for purposes of the administrative proceedings.
    (b) At any time prior to the closing of the hearing record, the 
complaint (investigative findings letter) or answer (response) may be 
amended with the permission of the Administrative Law Judge and upon 
such terms as he/she may approve. For proceedings pursuant to 
Sec. 10.51, such an amendment may include a statement that debarment 
action is warranted under Sec. 10.52. Such amendments shall be allowed 
when justice and the presentation of the merits are served thereby, 
provided there is no prejudice to the objecting party's presentation on 
the merits. When issues not raised by the pleadings are reasonably 
within the scope of the original complaint and are tried by express or 
implied consent of the parties, they shall be treated in all respects as 
if they had been raised in the pleadings, and such amendments may be 
made as necessary to make them conform to the evidence. The presiding 
Administrative Law Judge may, upon reasonable notice and upon such terms 
as are just, permit supplemental pleadings setting forth transactions, 
occurrences or events which have happened since the date of the 
pleadings and which are relevant to any of the issues

[[Page 192]]

involved. A continuance in the hearing may be granted or the record left 
open to enable the new allegations to be addressed.



Sec. 10.54  Consent findings and order.

    (a) At any time prior to the receipt of evidence or, at the 
Administrative Law Judge's discretion prior to the issuance of the 
Administrative Law Judge's decision, the parties may enter into consent 
findings and an order disposing of the proceeding in whole or in part.
    (b) Any agreement containing consent findings and an order disposing 
of a proceeding in whole or in part shall also provide:
    (1) That the order shall have the same force and effect as an order 
made after full hearing;
    (2) That the entire record on which any order may be based shall 
consist solely of the Administrator's findings letter and the agreement;
    (3) A waiver of any further procedural steps before the 
Administrative Law Judge and the Administrative Review Board regarding 
those matters which are the subject of the agreement; and
    (4) A waiver of any right to challenge or contest the validity of 
the findings and order entered into in accordance with the agreement.
    (c) Within 30 calendar days after receipt of an agreement containing 
consent findings and an order disposing of the disputed matter in whole, 
the Administrative Law Judge shall, if satisfied with its form and 
substance, accept such agreement by issuing a decision based upon the 
agreed findings and order. If such agreement disposes of only a part of 
the disputed matter, a hearing shall be conducted on the matters 
remaining in dispute.



Sec. 10.55  Proceedings of the Administrative Law Judge.

    (a) The Office of Administrative Law Judges has jurisdiction to hear 
and decide appeals concerning questions of law and fact from the 
Administrator's investigative findings letters issued under Secs. 10.51 
and 10.52. Any party may, when requesting an appeal or during the 
pendency of a proceeding on appeal, timely move an Administrative Law 
Judge to consolidate a proceeding initiated hereunder with a proceeding 
initiated under the Service Contract Act or the Davis-Bacon Act.
    (b) Proposed findings of fact, conclusions, and order. Within 20 
calendar days of filing of the transcript of the testimony or such 
additional time as the Administrative Law Judge may allow, each party 
may file with the Administrative Law Judge proposed findings of fact, 
conclusions of law, and a proposed order, together with a supporting 
brief expressing the reasons for such proposals. Each party shall serve 
such proposals and brief on all other parties.
    (c) Decision. (1) Within a reasonable period of time after the time 
allowed for filing of proposed findings of fact, conclusions of law, and 
order, or within 30 calendar days of receipt of an agreement containing 
consent findings and order disposing of the disputed matter in whole, 
the Administrative Law Judge shall issue a decision. The decision shall 
contain appropriate findings, conclusions, and an order, and be served 
upon all parties to the proceeding.
    (2) If the respondent is found to have violated Executive Order 
13658 or this part, and if the Administrator requested debarment, the 
Administrative Law Judge shall issue an order as to whether the 
respondent is to be subject to the ineligible list, including findings 
that the contractor disregarded its obligations to workers or 
subcontractors under the Executive Order or this part.
    (d) Limit on scope of review. The Equal Access to Justice Act, as 
amended, does not apply to proceedings under this part. Accordingly, 
Administrative Law Judges shall have no authority to award attorney's 
fees and/or other litigation expenses pursuant to the provisions of the 
Equal Access to Justice Act for any proceeding under this part.
    (e) Orders. If the Administrative Law Judge concludes a violation 
occurred, the final order shall mandate action to remedy the violation, 
including, but not limited to, monetary relief for unpaid wages. Where 
the Administrator has sought imposition of debarment, the Administrative 
Law Judge shall determine whether an order imposing debarment is 
appropriate.

[[Page 193]]

    (f) Finality. The Administrative Law Judge's decision shall become 
the final order of the Secretary, unless a timely petition for review is 
filed with the Administrative Review Board.



Sec. 10.56  Petition for review.

    (a) Within 30 calendar days after the date of the decision of the 
Administrative Law Judge (or such additional time as is granted by the 
Administrative Review Board), any party aggrieved thereby who desires 
review thereof shall file a petition for review of the decision with 
supporting reasons. Such party shall transmit the petition in writing to 
the Administrative Review Board with a copy thereof to the Chief 
Administrative Law Judge. The petition shall refer to the specific 
findings of fact, conclusions of law, or order at issue. A petition 
concerning the decision on debarment shall also state the disregard of 
obligations to workers and/or subcontractors, or lack thereof, as 
appropriate. A party must serve the petition for review, and all briefs, 
on all parties and the Chief Administrative Law Judge. It must also 
timely serve copies of the petition and all briefs on the Administrator, 
Wage and Hour Division, and on the Associate Solicitor, Division of Fair 
Labor Standards, Office of the Solicitor, U.S. Department of Labor, 
Washington, DC 20210.
    (b) Effect of filing. If a party files a timely petition for review, 
the Administrative Law Judge's decision shall be inoperative unless and 
until the Administrative Review Board issues an order affirming the 
letter or decision, or the letter or decision otherwise becomes a final 
order of the Secretary. If a petition for review concerns only the 
imposition of debarment, however, the remainder of the decision shall be 
effective immediately. No judicial review shall be available unless a 
timely petition for review to the Administrative Review Board is first 
filed.



Sec. 10.57  Administrative Review Board proceedings.

    (a) Authority--(1) General. The Administrative Review Board has 
jurisdiction to hear and decide in its discretion appeals concerning 
questions of law and fact from investigative findings letters of the 
Administrator issued under Sec. 10.51(c)(1) or (2), Administrator's 
rulings issued under Sec. 10.58, and decisions of Administrative Law 
Judges issued under Sec. 10.55. In considering the matters within the 
scope of its jurisdiction, the Administrative Review Board shall act as 
the authorized representative of the Secretary and shall act fully and 
finally on behalf of the Secretary concerning such matters.
    (2) Limit on scope of review. (i) The Board shall not have 
jurisdiction to pass on the validity of any provision of this part. The 
Board is an appellate body and shall decide cases properly before it on 
the basis of substantial evidence contained in the entire record before 
it. The Board shall not receive new evidence into the record.
    (ii) The Equal Access to Justice Act, as amended, does not apply to 
proceedings under this part. Accordingly, the Administrative Review 
Board shall have no authority to award attorney's fees and/or other 
litigation expenses pursuant to the provisions of the Equal Access to 
Justice Act for any proceeding under this part.
    (b) Decisions. The Board's final decision shall be issued within a 
reasonable period of time following receipt of the petition for review 
and shall be served upon all parties by mail to the last known address 
and on the Chief Administrative Law Judge (in cases involving an appeal 
from an Administrative Law Judge's decision).
    (c) Orders. If the Board concludes a violation occurred, the final 
order shall mandate action to remedy the violation, including, but not 
limited to, monetary relief for unpaid wages. Where the Administrator 
has sought imposition of debarment, the Board shall determine whether an 
order imposing debarment is appropriate.
    (d) Finality. The decision of the Administrative Review Board shall 
become the final order of the Secretary.



Sec. 10.58  Administrator ruling.

    (a) Questions regarding the application and interpretation of the 
rules contained in this part may be referred to the Administrator, who 
shall issue an appropriate ruling. Requests for such rulings should be 
addressed to the

[[Page 194]]

Administrator, Wage and Hour Division, U.S. Department of Labor, 
Washington, DC 20210.
    (b) Any interested party may appeal to the Administrative Review 
Board for review of a final ruling of the Administrator issued under 
paragraph (a) of this section. The petition for review shall be filed 
with the Administrative Review Board within 30 calendar days of the date 
of the ruling.



           Sec. Appendix A to 29 CFR Part 10--Contract Clause

    The following clause shall be included by the contracting agency in 
every contract, contract-like instrument, and solicitation to which 
Executive Order 13658 applies, except for procurement contracts subject 
to the Federal Acquisition Regulation (FAR):
    (a) Executive Order 13658. This contract is subject to Executive 
Order 13658, the regulations issued by the Secretary of Labor in 29 CFR 
part 10 pursuant to the Executive Order, and the following provisions.
    (b) Minimum Wages. (1) Each worker (as defined in 29 CFR 10.2) 
engaged in the performance of this contract by the prime contractor or 
any subcontractor, regardless of any contractual relationship which may 
be alleged to exist between the contractor and worker, shall be paid not 
less than the applicable minimum wage under Executive Order 13658.
    (2) The minimum wage required to be paid to each worker performing 
work on or in connection with this contract between January 1, 2015 and 
December 31, 2015 shall be $10.10 per hour. The minimum wage shall be 
adjusted each time the Secretary of Labor's annual determination of the 
applicable minimum wage under section 2(a)(ii) of Executive Order 13658 
results in a higher minimum wage. Adjustments to the Executive Order 
minimum wage under section 2(a)(ii) of Executive Order 13658 will be 
effective for all workers subject to the Executive Order beginning 
January 1 of the following year. If appropriate, the contracting 
officer, or other agency official overseeing this contract shall ensure 
the contractor is compensated only for the increase in labor costs 
resulting from the annual inflation increases in the Executive Order 
13658 minimum wage beginning on January 1, 2016. The Secretary of Labor 
will publish annual determinations in the Federal Register no later than 
90 days before such new wage is to take effect. The Secretary will also 
publish the applicable minimum wage on www.wdol.gov (or any successor 
Web site). The applicable published minimum wage is incorporated by 
reference into this contract.
    (3) The contractor shall pay unconditionally to each worker all 
wages due free and clear and without subsequent deduction (except as 
otherwise provided by 29 CFR 10.23), rebate, or kickback on any account. 
Such payments shall be made no later than one pay period following the 
end of the regular pay period in which such wages were earned or 
accrued. A pay period under this Executive Order may not be of any 
duration longer than semi-monthly.
    (4) The prime contractor and any upper-tier subcontractor shall be 
responsible for the compliance by any subcontractor or lower-tier 
subcontractor with the Executive Order minimum wage requirements. In the 
event of any violation of the minimum wage obligation of this clause, 
the contractor and any subcontractor(s) responsible therefore shall be 
liable for the unpaid wages.
    (5) If the commensurate wage rate paid to a worker on a covered 
contract whose wages are calculated pursuant to a special certificate 
issued under 29 U.S.C. 214(c), whether hourly or piece rate, is less 
than the Executive Order minimum wage, the contractor must pay the 
Executive Order minimum wage rate to achieve compliance with the Order. 
If the commensurate wage due under the certificate is greater than the 
Executive Order minimum wage, the contractor must pay the 14(c) worker 
the greater commensurate wage.
    (c) Withholding. The agency head shall upon its own action or upon 
written request of an authorized representative of the Department of 
Labor withhold or cause to be withheld from the prime contractor under 
this or any other Federal contract with the same prime contractor, so 
much of the accrued payments or advances as may be considered necessary 
to pay workers the full amount of wages required by Executive Order 
13658.
    (d) Contract Suspension/Contract Termination/Contractor Debarment. 
In the event of a failure to pay any worker all or part of the wages due 
under Executive Order 13658 or 29 CFR part 10, or a failure to comply 
with any other term or condition of Executive Order 13658 or 29 CFR part 
10, the contracting agency may on its own action or after authorization 
or by direction of the Department of Labor and written notification to 
the contractor, take action to cause suspension of any further payment, 
advance or guarantee of funds until such violations have ceased. 
Additionally, any failure to comply with the requirements of this clause 
may be grounds for termination of the right to proceed with the contract 
work. In such event, the Government may enter into other contracts or 
arrangements for completion of the work, charging the contractor in 
default with any additional cost. A breach of the contract clause may be 
grounds for debarment as a contractor and subcontractor as provided in 
29 CFR 10.52.

[[Page 195]]

    (e) The contractor may not discharge any part of its minimum wage 
obligation under Executive Order 13658 by furnishing fringe benefits or, 
with respect to workers whose wages are governed by the Service Contract 
Act, the cash equivalent thereof.
    (f) Nothing herein shall relieve the contractor of any other 
obligation under Federal, State or local law, or under contract, for the 
payment of a higher wage to any worker, nor shall a lower prevailing 
wage under any such Federal, State, or local law, or under contract, 
entitle a contractor to pay less than $10.10 (or the minimum wage as 
established each January thereafter) to any worker.
    (g) Payroll Records. (1) The contractor shall make and maintain for 
three years records containing the information specified in paragraphs 
(g)(1) (i) through (vi) of this section for each worker and shall make 
the records available for inspection and transcription by authorized 
representatives of the Wage and Hour Division of the U.S. Department of 
Labor:
    (i) Name, address, and social security number.
    (ii) The worker's occupation(s) or classification(s)
    (iii) The rate or rates of wages paid.
    (iv) The number of daily and weekly hours worked by each worker.
    (v) Any deductions made; and
    (vi) Total wages paid.
    (2) The contractor shall also make available a copy of the contract, 
as applicable, for inspection or transcription by authorized 
representatives of the Wage and Hour Division.
    (3) Failure to make and maintain or to make available such records 
for inspection and transcription shall be a violation of 29 CFR part 10 
and this contract, and in the case of failure to produce such records, 
the contracting officer, upon direction of an authorized representative 
of the Department of Labor, or under its own action, shall take such 
action as may be necessary to cause suspension of any further payment or 
advance of funds until such time as the violations are discontinued.
    (4) The contractor shall permit authorized representatives of the 
Wage and Hour Division to conduct investigations, including interviewing 
workers at the worksite during normal working hours.
    (5) Nothing in this clause limits or otherwise modifies the 
contractor's payroll and recordkeeping obligations, if any, under the 
Davis-Bacon Act, as amended, and its implementing regulations; the 
Service Contract Act, as amended, and its implementing regulations; the 
Fair Labor Standards Act, as amended, and its implementing regulations; 
or any other applicable law.
    (h) The contractor (as defined in 29 CFR 10.2) shall insert this 
clause in all of its covered subcontracts and shall require its 
subcontractors to include this clause in any covered lower-tier 
subcontracts. The prime contractor and any upper-tier subcontractor 
shall be responsible for the compliance by any subcontractor or lower-
tier subcontractor with this contract clause.
    (i) Certification of Eligibility. (1) By entering into this 
contract, the contractor (and officials thereof) certifies that neither 
it (nor he or she) nor any person or firm who has an interest in the 
contractor's firm is a person or firm ineligible to be awarded 
Government contracts by virtue of the sanctions imposed pursuant to 
section 5 of the Service Contract Act, section 3(a) of the Davis-Bacon 
Act, or 29 CFR 5.12(a)(1).
    (2) No part of this contract shall be subcontracted to any person or 
firm whose name appears on the list of persons or firms ineligible to 
receive Federal contracts.
    (3) The penalty for making false statements is prescribed in the 
U.S. Criminal Code, 18 U.S.C. 1001.
    (j) Tipped employees. In paying wages to a tipped employee as 
defined in section 3(t) of the Fair Labor Standards Act, 29 U.S.C. 
203(t), the contractor may take a partial credit against the wage 
payment obligation (tip credit) to the extent permitted under section 
3(a) of Executive Order 13658. In order to take such a tip credit, the 
employee must receive an amount of tips at least equal to the amount of 
the credit taken; where the tipped employee does not receive sufficient 
tips to equal the amount of the tip credit the contractor must increase 
the cash wage paid for the workweek so that the amount of cash wage paid 
and the tips received by the employee equal the applicable minimum wage 
under Executive Order 13658. To utilize this proviso:
    (1) The employer must inform the tipped employee in advance of the 
use of the tip credit;
    (2) The employer must inform the tipped employee of the amount of 
cash wage that will be paid and the additional amount by which the 
employee's wages will be considered increased on account of the tip 
credit;
    (3) The employees must be allowed to retain all tips (individually 
or through a pooling arrangement and regardless of whether the employer 
elects to take a credit for tips received); and
    (4) The employer must be able to show by records that the tipped 
employee receives at least the applicable Executive Order minimum wage 
through the combination of direct wages and tip credit.
    (k) Antiretaliation. It shall be unlawful for any person to 
discharge or in any other manner discriminate against any worker because 
such worker has filed any complaint or instituted or caused to be 
instituted any proceeding under or related to Executive Order

[[Page 196]]

13658 or 29 CFR part 10, or has testified or is about to testify in any 
such proceeding.
    (l) Disputes concerning labor standards. Disputes related to the 
application of Executive Order 13658 to this contract shall not be 
subject to the general disputes clause of the contract. Such disputes 
shall be resolved in accordance with the procedures of the Department of 
Labor set forth in 29 CFR part 10. Disputes within the meaning of this 
contract clause include disputes between the contractor (or any of its 
subcontractors) and the contracting agency, the U.S. Department of 
Labor, or the workers or their representatives.
    (m) Notice. The contractor must notify all workers performing work 
on or in connection with a covered contract of the applicable minimum 
wage rate under the Executive Order. With respect to service employees 
on contracts covered by the Service Contract Act and laborers and 
mechanics on contracts covered by the Davis-Bacon Act, the contractor 
may meet this requirement by posting, in a prominent and accessible 
place at the worksite, the applicable wage determination under those 
statutes. With respect to workers performing work on or in connection 
with a covered contract whose wages are governed by the FLSA, the 
contractor must post a notice provided by the Department of Labor in a 
prominent and accessible place at the worksite so it may be readily seen 
by workers. Contractors that customarily post notices to workers 
electronically may post the notice electronically provided such 
electronic posting is displayed prominently on any Web site that is 
maintained by the contractor, whether external or internal, and 
customarily used for notices to workers about terms and conditions of 
employment.



PART 11_DEPARTMENT OF LABOR NATIONAL ENVIRONMENTAL POLICY ACT (NEPA)
COMPLIANCE PROCEDURES--Table of Contents



                      Subpart A_General Provisions

Sec.
11.1  Purpose and scope.
11.2  Applicability.
11.3  Responsible agency officials.

                   Subpart B_Administrative Procedures

11.10  Identification of agency actions.
11.11  Development of environmental analyses and documents.
11.12  Content and format of environmental documents.
11.13  Public participation.
11.14  Legislation.

    Authority: NEPA, (42 U.S.C. 4321 et seq.), Executive Order 11514, 
Protection and Enhancement of Environmental Quality (March 5, 1970, as 
amended by Executive Order 11991, May 24, 1977) and Council on 
Environmental Quality Regulations (National Environmental Policy Act, 
Implementation of Procedural Provisions) 40 CFR parts 1500-1508 (43 FR 
55978).

    Source: 45 FR 51188, Aug. 1, 1980, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 11.1  Purpose and scope.

    (a) The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 
4321 et seq.) directs that, ``to the fullest extent possible, * * * the 
policies, regulations and public laws of the United States shall be 
interpreted and administered in accordance with the policies set forth'' 
in the Act for the preservation of the environment. As a means for 
achieving this objective, Executive Order 11991 of May 24, 1977 
(amending E.O. 11514 of March 5, 1970) directed the Council on 
Environmental Quality (CEQ) to issue uniform regulations for 
implementation of NEPA by all Federal agencies. These regulations were 
published in final form on November 29, 1978 (43 FR 55978) as 40 CFR 
parts 1500-1508. The CEQ's NEPA regulations require that each Federal 
agency adopt implementing procedures to supplement their regulations (40 
CFR 1507.3). Accordingly, the purpose of this part is to prescribe 
procedures to be followed by Department of Labor agencies when such 
agencies are contemplating actions which may be subject to the 
requirements of NEPA. These regulations do not replace 40 CFR parts 
1500-1508; rather they are to be read together with, and as a supplement 
to, the CEQ's regulations.
    (b) It is the responsibility of each agency to comply with the 
policies set forth in NEPA to the fullest extent possible and consistent 
with its statutory authority. Each agency shall comply with all 
applicable requirements of this part except where compliance would be 
inconsistent with other statutory requirements. However, no trivial 
violation of, or noncompliance with, these procedures shall give rise to 
an independent cause of action (cf. 40 CFR 1500.3 and 1507.3(b)).

[[Page 197]]



Sec. 11.2  Applicability.

    Although all Department of Labor agencies are subject to NEPA, only 
three of its agencies routinely propose or consider actions which may 
require the preparation of environment assessments or environmental 
impact statements. These are the Occupational Safety and Health 
Administration (OSHA), which acts pursuant to the Occupational Safety 
and Health Act of 1970 (29 U.S.C. 651, et seq.); the Mine Safety and 
Health Administration (MSHA), which acts pursuant to the Federal Mine 
Safety and Health Act of 1977 (30 U.S.C. 801, et seq.); and the Office 
of Job Corps which purchases and leases land and constructs Job Corps 
centers pursuant to the Workforce Investment Act of 1998 (29 U.S.C. 
2801, et seq.). Therefore, these procedures have been designed primarily 
with the duties and rulemaking processes of these agencies in mind. If 
and when other Department of Labor agencies propose actions requiring 
environmental impact analyses, they shall use these procedures, to the 
extent that they are applicable, in performing such analyses.

[45 FR 51188, Aug. 1, 1980, as amended at 72 FR 37098, July 9, 2007]



Sec. 11.3  Responsible agency officials.

    (a) The Assistant Secretary for Policy shall be responsible for the 
following:
    (1) Overall review of Department of Labor agency compliance with the 
requirements of NEPA, the CEQ's regulations and these Departmental 
procedures;
    (2) Maintaining contacts with CEQ and the Environmental Protection 
Agency (EPA) as the Departmental NEPA liaison; and
    (3) Preparing and coordinating Departmental comments in response to 
environmental impact statements prepared by other Federal agencies which 
have been submitted to the Department for review, as required by 40 CFR 
1503.2.
    (b) Assistant Secretaries of Labor and other officials of equivalent 
rank or responsibility (hereinafter ``agency heads'') shall be 
responsible for their agencies' compliance with NEPA.
    (1) These responsibilities shall include the following:
    (i) Assuring that the agencies under their control observe the 
requirements of 40 CFR 1507.2 on compliance capability;
    (ii) Preparing environmental impact assessments and statements in 
accordance with the requirements of these regulations and 40 CFR parts 
1501 and 1502, and advising private applicants, or other non-Federal 
entities, of the possible need for information foreseeably required for 
later Federal action pursuant to 40 CFR 1501.2(d);
    (iii) Assuring public participation in the NEPA process in 
accordance with 40 CFR parts 1503 and 1506;
    (iv) Commenting on environmental impact statements prepared by other 
agencies, when their agencies have jurisdiction by law or special 
expertise with respect to any environmental impacts connected with a 
proposed action, as required by 40 CFR part 1503;
    (v) Assuring that environmental documents prepared by their agencies 
accompany proposed actions through existing agency review processes, and 
that, along with other relevant materials, and consistent with 40 CFR 
1505.1(e), the full range of alternatives discussed in these documents 
are considered in the planning of agency actions and in the making of 
decisions and that the alternatives considered are encompassed by those 
discussed in the documents; and
    (vi) Assuring, where possible, the mitigation of adverse 
environmental effects of agency actions.
    (2) In accordance with 40 CFR 1506.5(c), agency heads will also be 
responsible for assuring the quality of environmental impact statements 
prepared by their agencies. Where environmental impact statements will 
be prepared by a contractor, the agency heads will assure that their 
agencies furnish guidance to the contractor, participate in the 
document's preparation, independently evaluate the statement prior to 
approval and take responsibility for the scope and contents.
    (c) Agency heads may designate program offices or individuals as 
NEPA contacts for their agencies. The name and address of the NEPA 
contact shall be included on the cover sheet of each

[[Page 198]]

environmental document published by the agency, or if no cover sheet is 
provided, the name and address of this office or individual shall be 
included with any instructions to the public on obtaining further 
information or submitting comments on the document.
    (1) It shall be the duty of an agency's NEPA contact to know the 
status of all environmental documents being prepared by the agency or in 
cooperation with another agency.
    (2) The NEPA contact shall receive and respond to inquiries 
concerning the status of all environmental documents being prepared 
within the agency or in cooperation with another agency.

[45 FR 51188, Aug. 1, 1980, as amended at 71 FR 16665, Apr. 3, 2006]



                   Subpart B_Administrative Procedures



Sec. 11.10  Identification of agency actions.

    Pursuant to the CEQ definition of ``major Federal action'' (40 CFR 
1508.18) and 40 CFR 1507.3(b)(2), the following paragraphs identify and 
classify Department of Labor actions which: normally will not require 
preparation of an environmental document (i.e. an environmental 
assessment or an environmental impact statement); or usually will 
require preparation of an environmental document.
    (a) OSHA/MSHA actions. Actions of the Occupational Safety and Health 
Administration (OSHA) and the Mine Safety and Health Administration 
(MSHA) are classified as follows:
    (1) Categorically excluded actions. OSHA/MSHA actions listed in the 
following Table will normally qualify for categorical exclusion from 
NEPA requirements: i.e., such actions do not require preparation of 
either an environmental assessment or an environmental impact statement, 
because they do not have a significant impact on the quality of the 
human environment. Classification as a categorical exclusion, however, 
does not prohibit OSHA or MSHA from preparing an environmental 
assessment or environmental impact statement on any of the following 
actions when OSHA or MSHA determines it to be appropriate. Also, in 
extraordinary circumstances where a normally excluded action is found to 
have a potentially significant environmental effect, OSHA or MSHA shall 
prepare an environmental assessment and/or an environmental impact 
statement as required.

                    OSHA/MSHA Categorical Exclusions
------------------------------------------------------------------------
              Type of action                    Reason for exclusion
------------------------------------------------------------------------
(i) Promulgation, modification or          Safety standards promote
 revocation of any safety standard.         injury avoidance by means of
 Examples of these actions are: Machine     mechanical applications or
 guarding requirements, safety lines,       work practices, the effects
 warning signals, etc.                      of which do not impact on
                                            air, water or soil quality,
                                            plant or animal life, the
                                            use of land or other aspects
                                            of the human environment.
(ii) Approval of petitions for variances   Variances are taken from
 from MSHA/OSHA safety standards or OSHA    existing standards. Thus
 health standards.                          environmental documents, as
                                            appropriate, will already
                                            have been prepared. In terms
                                            of worker health and safety,
                                            any variance must be at
                                            least as effective as the
                                            original standard.
(iii) Agency legislative requests for      Exempted by 40 CFR 1508.17.
 appropriations.
(iv) Recordkeeping and reporting           No possibility of significant
 requirements.                              environmental impact.
(v) Routine agency personnel actions.....  Such actions typically
                                            involve small numbers of
                                            individuals and have no
                                            possibility of significant
                                            environmental impact.
(vi) Training of employers, employees,     These actions involve
 agency personnel and others in the         educational activities which
 recognition, avoidance or abatement of     have no possibility of
 occupational hazards. Providing            significant environmental
 consultative services to industry.         impact.
(vii) Enforcement proceedings............  Exempted by 40 CFR 1508.18.
(viii) Equipment approvals...............  No possibility of significant
                                            environmental impact.
(ix) State grants under Sec. 503 of the    These grants assist States in
 Federal Mine Safety and Health Act.        developing and implementing
                                            laws to improve mine safety
                                            and health and to promote
                                            coordination between State
                                            and Federal governments.
                                            They have no possibility of
                                            significant environmental
                                            impact.
(x) Certification or qualification         No possibility of significant
 proceedings.                               environmental impact.
------------------------------------------------------------------------

    (2) Actions requiring environmental assessment. Several classes of 
OSHA/MSHA actions normally require the preparation of an environmental 
assessment prior to determining whether either a finding of no 
significant impact or an environmental impact statement must be 
prepared. (However,

[[Page 199]]

OSHA or MSHA may proceed to prepare an environmental impact statement, 
without first preparing an environmental assessment, if it determines 
such action to be appropriate or necessary, as provided by 40 CFR 
1501.3(a)). Actions in this classification include:
    (i) Promulgation, modification or revocation of a health standard; 
and
    (ii) Approval or revocation of State plans for the enforcement of 
safety and health standards (not applicable to MSHA).
    (3) Actions requiring preparation of an environmental impact 
statement. Preparation of an environmental impact statement will always 
be required for proposals for promulgation, modification or revocation 
of health standards which will significantly affect air, water or soil 
quality, plant or animal life, the use of land or other aspects of the 
human environment.
    (4) Emergency temporary standards. Situations requiring the issuance 
of emergency temporary standards (issued for a period of up to six 
months, pursuant to section 6(c) of the Occupational Safety and Health 
Act of 1970, and for a period of up to nine months, pursuant to section 
101(b) of the Federal Mine Safety and Health Act of 1977) are of such 
nature that the provisions of 40 CFR parts 1500 et seq. may not be 
strictly observable. Pursuant to 40 CFR 1506.11, however, OSHA and MSHA 
will consult with the Council on Environmental Quality in connection 
with such situations, and will, in any event, prepare environmental 
assessments or environmental impact statements, as appropriate, on any 
proposed permanent regulation to be promulgated for the purpose of 
replacing the temporary action.
    (b) Real property actions. Actions that will involve construction, 
or the purchase or lease of property, in connection with the 
establishment or substantial alteration of a Job Corps center, of any 
similar Job Corps facility, or other property actions of a similar 
character by another agency, will normally require the preparation of an 
environmental assessment prior to determining whether either a finding 
of no significant impact or an environmental impact statement must be 
prepared.
    (c) Other Departmental actions. Certain actions taken to implement 
other Department of Labor programs will normally qualify for categorical 
exclusion from NEPA requirements. These matters are excluded because the 
possibility of environmental impact is remote. However, classification 
as a categorical exclusion does not prohibit or release an agency from 
preparing an environmental assessment or environmental impact statement 
when the agency determines it to be appropriate. These actions include:
    (1) Office of Workforce Investment activities and related placement, 
counseling, recruitment, information, testing, certification and 
associated actions;
    (2) Apprenticeship activities and related certification and 
technical assistance actions;
    (3) Training activities, other than Job Corps, including work 
experience, classroom training and public service employment;
    (4) Unemployment insurance, trade adjustment assistance, workers' 
compensation programs, retirement programs, employee protection 
programs, and related employees benefit programs or activities involving 
the replacement or regulation of employee wages;
    (5) Wage and hour programs to protect low-income workers, eliminate 
discriminatory employment practices, prevent curtailment of employment 
and earnings for certain groups of workers, minimize loss of income due 
to indebtedness, protect farm and migrant labor and related activities;
    (6) Contract compliance programs to ensure equal employment 
opportunity and related actions;
    (7) Labor-management relations activities and activities of labor 
organizations, employers and their officers or representatives;
    (8) Research, evaluation, development and information collection 
projects related to any of the aforementioned activities;
    (9) Labor statistics programs; and

[[Page 200]]

    (10) Matters involving personnel policy, procurement policy, freedom 
of information and privacy policy, and related matters of Departmental 
management.

[45 FR 51188, Aug. 1, 1980, as amended at 72 FR 37098, July 9, 2007]



Sec. 11.11  Development of environmental analyses and documents.

    (a) Potential environmental effects of agency actions shall begin to 
be examined at the time a topic for potential action is submitted to the 
agency staff for research, proposal development, or other consideration. 
During this stage the agency shall determine whether the type of action 
which may be proposed may be categorically excluded from NEPA 
environmental analysis requirements pursuant to Sec. 11.10. If the type 
of action being considered is not categorically excluded, or is an 
extraordinary case of a normally excluded action which may have 
significant environmental impacts, development of the information needed 
to make an environmental assessment shall begin. Actions described in 
Sec. 11.10(b) shall be submitted to the Assistant Secretary for 
Administration and Management at this point, pursuant to applicable 
Departmental procedures, for appropriate review, including a 
determination with respect to whether or not the action is located in or 
near a floodplain or wetlands area in connection with the requirements 
of Executive Orders 11988 and 11990.
    (b) When information gathered during the early stages of proposal 
development indicates that preparation of an environmental impact 
statement will be required, the agency shall begin preparation of such a 
document by initiating the scoping process in accordance with 40 CFR 
1501.7. However, if the information is not clearly indicative of the 
need for preparation of an environmental impact statement, an 
environmental assessment shall be prepared.
    (c) Agencies are encouraged, in developing environmental 
assessments, to explore all factors which it may become necessary to 
examine should it be determined that preparation of an environmental 
impact statement is necessary, even though some of those factors, such 
as economic and social effects, ``are not intended by themselves to 
require preparation of an environmental impact statement'' (40 CFR 
1508.14). Thus in making environmental assessments of real property 
actions described in Sec. 11.10(b), agencies are encouraged to consider 
the following factors, among others:
    (1) The nature and degree of any former use of a proposed facility 
and the number of individuals the facility formerly served, as compared 
with its use and population to be served under the new proposal;
    (2) The population of the area (numbers, density and makeup);
    (3) Community facilities and services, taking into consideration 
capacity and present and former use, including: Health services 
(hospitals, physicians), business and community development policy, 
recreational facilities (parks, theaters), fire and police protection, 
schools, energy resources, waste disposal, water, traffic and roadway 
systems, sewage systems, communications, and public transportation;
    (4) The proximity of the facility to residential areas;
    (5) The potential impact on the quality of drinking water, air 
quality, noise levels, designated scenic areas, land use, soil quality 
(including drainage or erosion problems), buildings valued for their 
design or which are otherwise locally significant, the listing or 
eligibility for listing of a site in the National Register for Historic 
places, consistent with the requirements of 20 CFR 684.24a where 
applicable, neighborhood character, and health and safety of residents;
    (6) The potential impact on natural systems and resources including 
rivers and streams, forests, wetlands, floodplains, wilderness areas or 
places, and species designated for preservation, including species of 
plants and animals and their critical habitats as identified in 
regulations published by the Secretary of the Interior (50 CFR chapter 
I, part 17), and by the Secretary of Commerce (50 CFR chapter II, parts 
217, 222.23, 223, and 227.4); and
    (7) Other considerations appropriate in light of the nature and size 
of the project.
    (d) If an agency determines, on the basis of an environmental 
assessment,

[[Page 201]]

that preparation of an environmental impact statement is not required, 
notice of a finding of no significant impact and the availability of the 
environmental assessment shall be prepared and published in the Federal 
Register. In the case of proposed rulemaking, the notice of a finding of 
no significant impact may be published in the Federal Register at any 
time prior to the publication of the proposed action, or it may be 
included in the Federal Register notice of proposed rulemaking. Issuance 
of a finding of no significant impact at the proposal stage of 
rulemaking shall not foreclose further consideration of environmental 
issues during the rulemaking proceedings. Therefore the Department of 
Labor notes that, consistent with 40 CFR 1500.3, the finding shall not 
be considered final until promulgation of the rule involved (the action 
affecting the environment).
    (1) If it is determined that preparation of an environmental impact 
statement is not required for an action, but that action is one which 
would normally require the preparation of an environmental impact 
statement, an action closely similar to one which would normally require 
the preparation of an environmental impact statement, or an action 
without precedent in this regard, the agency shall make a preliminary 
finding of no significant impact available for public review and 
comment. In accordance with 40 CFR 1501.4(e)(2), this finding shall be 
made available for at least 30 days before a final determination is made 
as to whether an environmental impact statement will be prepared, and 
before any public record may be closed and the proposed action may 
become effective.
    (2) Although not required by 40 CFR 1501.4(e)(2), an agency may use 
the procedure described in Sec. 11.11(d)(1) whenever the agency 
determines it to be appropriate.
    (e) If it is determined on the basis of an environmental assessment, 
prepared in connection with an action described in Sec. 11.10(b), that 
preparation of an environmental impact statement is required, or that 
public review is required in connection with actions in floodplains or 
wetlands that do not require environmental impact statements under E.O. 
11988 or E.O. 11990, the agency shall consider altering the proposed 
action or changing the site of the proposed project, and shall proceed 
with preparation of an environmental impact statement or appropriate 
public review actions only after obtaining written authorization from 
the Assistant Secretary for Administration and Management.
    (f) Filing of any draft environmental impact statement with the 
Environmental Protection Agency (EPA), pursuant to 40 CFR 1506.9, and 
circulation to the public, will ordinarily coincide with publication of 
the proposed agency action, which is the subject of that document, in 
the Federal Register. In any event, the statement will be made available 
for public comment for at least a 45-day period.
    (g) The final decision on the proposed action shall be made not 
earlier than 90 days following publication of EPA's notice of the filing 
of the draft environmental impact statement, and, except as provided 
below, not earlier than 30 days following publication of EPA's notice of 
the filing of the final environmental impact statement.
    (1) In accordance with 40 CFR 1506.10, an agency engaged in 
rulemaking under the Administrative Procedure Act or other statute, for 
the purpose of protecting the public health or safety, may waive the 30-
day time period noted above and publish a decision on a final rule 
simultaneously with publication of the notice of the availability of the 
final environmental impact statement. Therefore, Departmental agencies 
(such as OSHA and MSHA) meeting these requirements, may file and 
circulate the final environmental impact statement at the same time a 
notice of decision is being published, provided that the final rule or 
action may not become effective for at least 30 days from the date of 
publication of the EPA's notice of filing of the final environmental 
impact statement.
    (2) If a supplement to a final environmental impact statement is 
prepared, it shall be incorporated into the rulemaking record. If the 
supplement is prepared following the close of the rulemaking record and 
is based on, or

[[Page 202]]

introduces, new data or major new alternatives or analyses, the 
rulemaking record will be reopened for at least 30 days to receive 
public comments. The final action may not become effective for at least 
30 days following EPA publication of the filing of the supplemental 
statement.
    (h) In accordance with 40 CFR 1505.2, when an agency prepares a 
final environmental impact statement, the agency shall prepare a concise 
public record of decision detailing what the decision was, what 
alternatives were considered (specifying the environmentally preferable 
alternative), how those considerations entered into the decision, and 
whether all practicable means to avoid or minimize environmental harm 
from the alternative selected have been adopted, and if not, the reason 
they were not. This record may be contained in, or integrated with, the 
preamble to the Federal Register notice of final action or in any other 
public document considered appropriate by the agency.



Sec. 11.12  Content and format of environmental documents.

    (a) An environmental assessment may be prepared in any format 
considered effective by the agency involved. When such a document is 
prepared in connection with a proposed action, it must be made readily 
available to the public either by placement into the public record (with 
public notice provided in accordance with 40 CFR part 1506) or by 
publication in the Federal Register. The preamble to the Federal 
Register notice of proposed rulemaking may be considered the 
environmental assessment provided that the document contains the 
elements required by 40 CFR 1508.9(b).
    (b) A finding of no significant impact (40 CFR 1508.13) may be 
prepared in any format considered to be effective or necessary by the 
agency involved in the proposed action.
    (c) The finding of no significant impact, and the environmental 
assessment on which it was based, as well as any comments received in 
response to these documents shall be included in the public record of 
the proposed action.
    (d) Department of Labor agencies shall comply with the format 
requirements for environmental impact statements as set forth at 40 CFR 
1502.10, except when an agency determines that there is a compelling 
reason to do otherwise, such as more effective communication or reduced 
duplication of effort and paperwork (40 CFR 1506.4). For example, in 
OSHA/MSHA informal rulemaking proceedings, environmental documents may 
be combined with the Federal Register notice of proposed or final 
rulemaking. Filing and circulation of the combined preamble/
environmental document shall be in accordance with the requirements of 
40 CFR 1506.9.
    (e) The final environmental impact statement shall contain any 
changes in information or supplemental information received since the 
filing and circulation of the draft environmental impact statement, as 
well as a summary, or copies of the substantive comments received in 
response to the draft environmental impact statement. If such changes 
and comments are minor, an agency may circulate only the changes and 
comments, including responses to the comments, rather than the entire 
impact statement, to the extent permitted by 40 CFR 1502.19. However, 
the entire document, with a new cover sheet, shall be filed with EPA and 
placed in the rulemaking record.



Sec. 11.13  Public participation.

    (a) When an agency has determined that preparation of an 
environmental impact statement is required, the agency shall publish a 
notice of intent to prepare an environmental impact statement in the 
Federal Register and shall invite public participation in the agency's 
scoping process as required by 40 CFR 1501.7.
    (b) When the draft environmental impact statement has been prepared 
and filed with the EPA pursuant to Sec. 11.11(f), comments on the 
document shall be solicited from appropriate Federal, State and local 
agencies, Indian tribes, and other persons or organizations who may be 
interested or affected, as required by 40 CFR 1503.1.
    (c) In the case of an action with effects primarily of local 
concern, agencies shall consider the use of clearinghouses, newspapers 
and other public

[[Page 203]]

media likely to generate local participation in the agency process as 
ways of supplementing the notices otherwise specified in this part. The 
use of such public media does not, however, require or authorized the 
use of paid advertising.



Sec. 11.14  Legislation.

    Notwithstanding any provisions of this part, environmental 
assessments or impact statements prepared in connection with requests 
for new legislation or modification of existing statutes shall be 
handled in accordance with applicable OMB and Department of Labor 
procedures on the preparation and submission of legislative proposals 
and the requirements of 40 CFR 1506.8.



PART 12_UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION
FOR FEDERAL AND FEDERALLY ASSISTED PROGRAMS--Table of Contents



    Authority: Section 213, Uniform Relocation Assistance and Real 
Property Acquisition Policies Act of 1970, Public Law 91-646, 84 Stat. 
1894 (42 U.S.C. 4601) as amended by the Surface Transportation and 
Uniform Relocation Assistance Act of 1987. title IV of Public Law 100-
17, 101 Stat. 246-256 (42 U.S.C. 4601 note).



Sec. 12.1  Uniform relocation assistance and real property acquisition.

    Regulations and procedures for complying with the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act of 1970 (Pub. L 
91-646, 84 Stat. 1894, 42 U.S.C. 4601), as amended by the Surface 
Transportation and Uniform Relocation Assistance Act of 1987 (title IV 
of Pub. L. 100-17, 101 Stat. 246-255, 42 U.S.C. 4601 note) are set forth 
in 49 CFR part 24.

[52 FR 48020, Dec. 17, 1987, and 54 FR 8912, Mar. 2, 1989]



PART 13_ESTABLISHING PAID SICK LEAVE FOR FEDERAL CONTRACTORS
--Table of Contents



                            Subpart A_General

Sec.
13.1  Purpose and scope.
13.2  Definitions.
13.3  Coverage.
13.4  Exclusions.
13.5  Paid sick leave for Federal contractors and subcontractors.
13.6  Prohibited acts.
13.7  Waiver of rights.
13.8  Multiemployer plans or other funds, plans, or programs.

                Subpart B_Federal Government Requirements

13.11  Contracting agency requirements.
13.12  Department of Labor requirements.

                    Subpart C_Contractor Requirements

13.21  Contract clause.
13.22  Paid sick leave.
13.23  Deductions.
13.24  Anti-kickback.
13.25  Records to be kept by contractors.
13.26  Notice.
13.27  Timing of pay.

                          Subpart D_Enforcement

13.41  Complaints.
13.42  Wage and Hour Division conciliation.
13.43  Wage and Hour Division investigation.
13.44  Remedies and sanctions.

                  Subpart E_Administrative Proceedings

13.51  Disputes concerning contractor compliance.
13.52  Debarment proceedings.
13.53  Referral to Chief Administrative Law Judge; amendment of 
          pleadings.
13.54  Consent findings and order.
13.55  Administrative Law Judge proceedings.
13.56  Petition for review.
13.57  Administrative Review Board proceedings.
13.58  Administrator ruling.

Appendix A to Part 13--Contract Clause

    Authority: 5 U.S.C. 301; E.O. 13706, 80 FR 54697, 3 CFR, 2016 Comp., 
p. 367; Secretary's Order 01-2014, 79 FR 77527.

    Source: 81 FR 67709, Sept. 30, 2016, unless otherwise noted.



                            Subpart A_General



Sec. 13.1  Purpose and scope.

    (a) Purpose. This part contains the Department of Labor's rules 
relating to the administration and enforcement of Executive Order 13706 
(Executive Order or the Order), ``Establishing Paid Sick Leave for 
Federal Contractors.'' The Order states that providing paid sick leave 
to employees will improve the health and performance of employees

[[Page 204]]

of Federal contractors and will bring benefits packages offered by 
Federal contractors in line with model employers, ensuring they remain 
competitive in the search for dedicated and talented employees. The 
Executive Order concludes that providing paid sick leave will result in 
savings and quality improvements in the work performed by parties who 
contract with the Federal Government that will in turn lead to improved 
economy and efficiency in Government procurement.
    (b) Policy. Executive Order 13706 sets forth the general position of 
the Federal Government that providing access to paid sick leave on 
Federal contracts will increase efficiency and cost savings for the 
Federal Government. The Order therefore provides that executive 
departments and agencies shall, to the extent permitted by law, ensure 
that new covered contracts, contract-like instruments, and solicitations 
(collectively referred to as ``contracts'') include a clause, which the 
contractor and any subcontractors shall incorporate into lower-tier 
subcontracts, specifying, as a condition of payment, that employees will 
earn not less than 1 hour of paid sick leave for every 30 hours worked 
on or in connection with covered contracts.
    (c) Scope. Neither Executive Order 13706 nor this part creates or 
changes any rights under the Contract Disputes Act or creates any 
private right of action. The Executive Order provides that disputes 
regarding whether a contractor has provided paid sick leave as 
prescribed by the Order, to the extent permitted by law, shall be 
disposed of only as provided in this part. However, nothing in the Order 
or this part is intended to limit or preclude a civil action under the 
False Claims Act, 31 U.S.C. 3730, or criminal prosecution under 18 
U.S.C. 1001. The Order and this part similarly do not preclude judicial 
review of final decisions by the Secretary of Labor in accordance with 
the Administrative Procedure Act, 5 U.S.C. 701 et seq.



Sec. 13.2  Definitions.

    For purposes of this part:
    Accrual year means the 12-month period during which a contractor may 
limit an employee's accrual of paid sick leave to no less than 56 hours.
    Administrative Review Board (ARB or Board) means the Administrative 
Review Board, U.S. Department of Labor.
    Administrator means the Administrator of the Wage and Hour Division 
and includes any official of the Wage and Hour Division authorized to 
perform any of the functions of the Administrator under this part.
    As soon as is practicable means as soon as both possible and 
practical, taking into account all of the facts and circumstances of the 
individual case.
    Certification issued by a health care provider means any type of 
written document created or signed by a health care provider (or by a 
representative of the health care provider) that contains information 
verifying that the physical or mental illness, injury, medical 
condition, or need for diagnosis, care, or preventive care or other need 
for care referred to in Sec. 13.5(c)(1)(i), (ii), or (iii) exists. The 
health care provider (or representative) need not have seen the employee 
or the individual for whom the employee is caring in person to create a 
valid certification.
    Child means:
    (1) A biological, adopted, step, or foster son or daughter of the 
employee;
    (2) A person who is a legal ward or was a legal ward of the employee 
when that individual was a minor or required a legal guardian;
    (3) A person for whom the employee stands in loco parentis or stood 
in loco parentis when that individual was a minor or required someone to 
stand in loco parentis; or
    (4) A child, as described in paragraphs (1) through (3) of this 
definition, of an employee's spouse or domestic partner.
    Concessions contract or contract for concessions means 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 
the principal purpose of which is to furnish food, lodging, automobile 
fuel, souvenirs, newspaper stands, and/or recreational equipment, 
regardless of whether the services are of direct

[[Page 205]]

benefit to the Government, its personnel, or the general public.
    Contract or contract-like instrument means an agreement between two 
or more parties creating obligations that are enforceable or otherwise 
recognizable at law. This definition includes, but is not limited to, a 
mutually binding legal relationship obligating one party to furnish 
services (including construction) and another party to pay for them. The 
term contract includes all contracts and any subcontracts of any tier 
thereunder, whether negotiated or advertised, including any procurement 
actions, lease agreements, cooperative agreements, provider agreements, 
intergovernmental service agreements, service agreements, licenses, 
permits, or any other type of agreement, regardless of nomenclature, 
type, or particular form, and whether entered into verbally or in 
writing. The term contract shall be interpreted broadly to include, but 
not be limited to, any contract that may be consistent with the 
definition provided in the Federal Acquisition Regulation (FAR) or 
applicable Federal statutes. This definition includes, but is not 
limited to, any contract that may be covered under any Federal 
procurement statute. Contracts may be the result of competitive bidding 
or awarded to a single source under applicable authority to do so. In 
addition to bilateral instruments, contracts include, but are not 
limited to, awards and notices of awards; job orders or task letters 
issued under basic ordering agreements; letter contracts; orders, such 
as purchase orders, under which the contract becomes effective by 
written acceptance or performance; and bilateral contract modifications. 
The term contract includes contracts covered by the Service Contract 
Act, contracts covered by the Davis-Bacon Act, concessions contracts not 
subject to the Service Contract Act, and contracts in connection with 
Federal property or land and related to offering services for Federal 
employees, their dependents, or the general public.
    Contracting officer means a representative of an executive 
department or agency with the authority to enter into, administer, and/
or terminate contracts and make related determinations and findings. 
This term includes certain authorized representatives of the contracting 
officer acting within the limits of their authority as delegated by the 
contracting officer.
    Contractor means any individual or other legal entity that is 
awarded a Federal Government contract or subcontract under a Federal 
Government contract. The term contractor refers to both a prime 
contractor and all of its subcontractors of any tier on a contract with 
the Federal Government. The term contractor includes lessors and 
lessees. The term employer is used interchangeably with the terms 
contractor and subcontractor in various sections of this part. The U.S. 
Government, its agencies, and instrumentalities are not contractors, 
subcontractors, employers, or joint employers for purposes of compliance 
with the provisions of the Executive Order.
    Davis-Bacon Act (DBA) means the Davis-Bacon Act of 1931, as amended, 
40 U.S.C. 3141 et seq., and its implementing regulations.
    Domestic partner means an adult in a committed relationship with 
another adult. A committed relationship is one in which the employee and 
the domestic partner of the employee are each other's sole domestic 
partner (and are not married to or domestic partners with anyone else) 
and share responsibility for a significant measure of each other's 
common welfare and financial obligations. This includes, but is not 
limited to, any relationship between two individuals of the same or 
opposite sex that is granted legal recognition by a State or by the 
District of Columbia as a marriage or analogous relationship (including, 
but not limited to, a civil union).
    Domestic violence means:
    (1) Felony or misdemeanor crimes of violence (including threats or 
attempts) committed:
    (i) By a current or former spouse, domestic partner, or intimate 
partner of the victim;
    (ii) By a person with whom the victim shares a child in common;
    (iii) By a person who is cohabitating with or has cohabitated with 
the victim as a spouse, domestic partner, or intimate partner;
    (iv) By a person similarly situated to a spouse of the victim under 
civil or

[[Page 206]]

criminal domestic or family violence laws of the jurisdiction in which 
the victim resides or the events occurred; or
    (v) By any other adult person against a victim who is protected from 
that person's acts under the civil or criminal domestic or family 
violence laws of the jurisdiction in which the victim resides or the 
events occurred.
    (2) Domestic violence also includes any crime of violence considered 
to be an act of domestic violence under the civil or criminal domestic 
or family violence laws of the jurisdiction in which the victim resides 
or the events occurred.
    Employee means any person engaged in performing work on or in 
connection with a contract covered by the Executive Order, and whose 
wages under such contract are governed by the Service Contract Act, the 
Davis-Bacon Act, or the Fair Labor Standards Act, including employees 
who qualify for an exemption from the Fair Labor Standards Act's minimum 
wage and overtime provisions, regardless of the contractual relationship 
alleged to exist between the individual and the employer. The term 
employee includes any person performing work on or in connection with a 
covered contract and individually registered in a bona fide 
apprenticeship or training program registered with the U.S. Department 
of Labor's Employment and Training Administration, Office of 
Apprenticeship, or with a State Apprenticeship Agency recognized by the 
Office of Apprenticeship. An employee performs ``on'' a contract if the 
employee directly performs the specific services called for by the 
contract. An employee performs ``in connection with'' a contract if the 
employee's work activities are necessary to the performance of a 
contract but are not the specific services called for by the contract.
    Executive departments and agencies means executive departments 
within the meaning of 5 U.S.C. 101, military departments within the 
meaning of 5 U.S.C. 102, or any independent establishments within the 
meaning of 5 U.S.C. 104(1) or 39 U.S.C. 201, and any wholly owned 
Government corporation within the meaning of 31 U.S.C. 9101.
    Executive Order 13495 or Nondisplacement Executive Order means 
Executive Order 13495 of January 30, 2009, Nondisplacement of Qualified 
Workers Under Service Contracts, 74 FR 6103 (Feb. 4, 2009), and its 
implementing regulations at 29 CFR part 9.
    Executive Order 13658 or Minimum Wage Executive Order means 
Executive Order 13658 of February 12, 2014, Establishing a Minimum Wage 
for Contractors, 79 FR 9851 (Feb. 20, 2014), and its implementing 
regulations at 29 CFR part 10.
    Fair Labor Standards Act (FLSA) means the Fair Labor Standards Act 
of 1938, as amended, 29 U.S.C. 201 et seq., and its implementing 
regulations.
    Family and Medical Leave Act (FMLA) means the Family and Medical 
Leave Act of 1993, as amended, 29 U.S.C. 2601 et seq., and its 
implementing regulations.
    Family violence means any act or threatened act of violence, 
including any forceful detention of an individual that results or 
threatens to result in physical injury and is committed by a person 
against another individual (including an elderly individual) to or with 
whom such person is related by blood, is or was related by marriage or 
is or was otherwise legally related, or is or was lawfully residing.
    Federal Government means an agency or instrumentality of the United 
States that enters into a contract pursuant to authority derived from 
the Constitution or the laws of the United States. For purposes of the 
Executive Order and this part, this definition does not include the 
District of Columbia, any Territory or possession of the United States, 
or any independent regulatory agency within the meaning of 44 U.S.C. 
3502(5).
    Health care provider means any practitioner who is licensed or 
certified under Federal or State law to provide the health-related 
service in question or any practitioner recognized by an employer or the 
employer's group health plan. The term includes, but is not limited to, 
doctors of medicine or osteopathy, podiatrists, dentists, psychologists, 
optometrists, chiropractors, nurse practitioners, nurse-midwives, 
clinical social workers, physician assistants, physical therapists, and

[[Page 207]]

Christian Science Practitioners listed with the First Church of Christ, 
Scientist in Boston, Massachusetts.
    Independent agencies means independent regulatory agencies within 
the meaning of 44 U.S.C. 3502(5).
    Individual related by blood or affinity whose close association with 
the employee is the equivalent of a family relationship means any person 
with whom the employee has a significant personal bond that is or is 
like a family relationship, regardless of biological or legal 
relationship.
    Intimate partner means a person who is or has been in a social 
relationship of a romantic or intimate nature with the victim, where the 
existence of such a relationship shall be determined based on a 
consideration of the length of the relationship; the type of 
relationship; and the frequency of interaction between the persons 
involved in the relationship.
    Multiemployer plan means a plan to which more than one employer is 
required to contribute and which is maintained pursuant to one or more 
collective bargaining agreements between one or more employee 
organizations and more than one employer.
    New contract means a contract that results from a solicitation 
issued on or after January 1, 2017, or a contract that is awarded 
outside the solicitation process on or after January 1, 2017. This term 
includes both new contracts and replacements for expiring contracts. It 
does not apply to the unilateral exercise of a pre-negotiated option to 
renew an existing contract by the Federal Government. For purposes of 
the Executive Order, a contract that is entered into prior to January 1, 
2017 will constitute a new contract if, through bilateral negotiation, 
on or after January 1, 2017:
    (1) The contract is renewed;
    (2) The contract is extended, unless the extension is made pursuant 
to a term in the contract as of December 31, 2016 providing for a short-
term limited extension; or
    (3) The contract is amended pursuant to a modification that is 
outside the scope of the contract.
    Obtain additional counseling, seek relocation, seek assistance from 
a victim services organization, or take related legal action, used in 
reference to domestic violence, sexual assault, or stalking, means to 
spend time arranging, preparing for, or executing acts related to 
addressing physical injuries or mental or emotional impacts resulting 
from being a victim of domestic violence, sexual assault, or stalking. 
Such acts include finding and using services of a counselor or victim 
services organization intended to assist a victim to respond to or 
prevent future incidents of domestic violence, sexual assault, or 
stalking; identifying and moving to a different residence to avoid being 
a victim of domestic violence, sexual assault, or stalking; or a 
victim's pursuing any related legal action.
    Obtaining diagnosis, care, or preventive care from a health care 
provider means receiving services from a health care provider, whether 
to identify, treat, or otherwise address an existing condition or to 
prevent potential conditions from arising. The term includes time spent 
traveling to and from the location at which such services are provided 
or recovering from receiving such services.
    Office of Administrative Law Judges means the Office of 
Administrative Law Judges, U.S. Department of Labor.
    Option means a unilateral right in a contract by which, for a 
specified time, the Government may elect to purchase additional supplies 
or services called for by the contract, or may elect to extend the term 
of the contract.
    Paid sick leave means compensated absence from employment that is 
required by Executive Order 13706 and this part.
    Parent means:
    (1) A biological, adoptive, step, or foster parent of the employee, 
or a person who was a foster parent of the employee when the employee 
was a minor;
    (2) A person who is the legal guardian of the employee or was the 
legal guardian of the employee when the employee was a minor or required 
a legal guardian;
    (3) A person who stands in loco parentis to the employee or stood in 
loco parentis to the employee when the employee was a minor or required 
someone to stand in loco parentis; or
    (4) A parent, as described in paragraphs (1) through (3) of this 
definition,

[[Page 208]]

of an employee's spouse or domestic partner.
    Physical or mental illness, injury, or medical condition means any 
disease, sickness, disorder, or impairment of, or any trauma to, the 
body or mind.
    Procurement contract for construction means a procurement contract 
for the construction, alteration, or repair (including painting and 
decorating) of public buildings or public works and which requires or 
involves the employment of mechanics or laborers, and any subcontract of 
any tier thereunder. The term procurement contract for construction 
includes any contract subject to the Davis-Bacon Act.
    Procurement contract for services means a contract the principal 
purpose of which is to furnish services in the United States through the 
use of service employees, and any subcontract of any tier thereunder. 
The term procurement contract for services includes any contract subject 
to the Service Contract Act.
    Related legal action or related civil or criminal legal proceeding, 
used in reference to domestic violence, sexual assault, or stalking, 
means any type of legal action, in any forum, that relates to the 
domestic violence, sexual assault, or stalking, including, but not 
limited to, family, tribal, territorial, immigration, employment, 
administrative agency, housing matters, campus administrative or 
protection or stay-away order proceedings, and other similar matters; 
and criminal justice investigations, prosecutions, and post-trial 
matters (including sentencing, parole, and probation) that impact the 
victim's safety and privacy.
    Secretary means the Secretary of Labor and includes any official of 
the U.S. Department of Labor authorized to perform any of the functions 
of the Secretary of Labor under this part.
    Service Contract Act (SCA) means the McNamara-O'Hara Service 
Contract Act of 1965, as amended, 41 U.S.C. 6701 et seq., and its 
implementing regulations.
    Sexual assault means any nonconsensual sexual act proscribed by 
Federal, tribal, or State law, including when the victim lacks capacity 
to consent.
    Solicitation means any request to submit offers, bids, or quotations 
to the Federal Government.
    Spouse means the other person with whom an individual entered into 
marriage as defined or recognized under State law for purposes of 
marriage in the State in which the marriage was entered into or, in the 
case of a marriage entered into outside of any State, if the marriage is 
valid in the place where entered into and could have been entered into 
in at least one State. This definition includes an individual in a 
common law marriage that was entered into in a State that recognizes 
such marriages or, if entered into outside of any State, is valid in the 
place where entered into and could have been entered into in at least 
one State.
    Stalking means engaging in a course of conduct directed at a 
specific person that would cause a reasonable person to fear for his or 
her safety or the safety of others or suffer substantial emotional 
distress.
    United States means the United States and all executive departments, 
independent establishments, administrative agencies, and 
instrumentalities of the United States, including corporations of which 
all or substantially all of the stock is owned by the United States, by 
the foregoing departments, establishments, agencies, and 
instrumentalities, including nonappropriated fund instrumentalities. 
When used in a geographic sense, the United States means the 50 States 
and the District of Columbia.
    Victim services organization means a nonprofit, nongovernmental, or 
tribal organization or rape crisis center, including a State or tribal 
coalition, that assists or advocates for victims of domestic violence, 
sexual assault, or stalking, including domestic violence shelters, 
faith-based organizations, and other organizations, with a documented 
history of effective work concerning domestic violence, sexual assault, 
or stalking.
    Violence Against Women Act (VAWA) means the Violence Against Women 
Act of 1994, 42 U.S.C. 13925 et seq., and its implementing regulations.
    Wage and Hour Division means the Wage and Hour Division, U.S. 
Department of Labor.

[[Page 209]]



Sec. 13.3  Coverage.

    (a) This part applies to any new contract with the Federal 
Government, unless excluded by Sec. 13.4, provided that:
    (1)(i) It is a procurement contract for construction covered by the 
Davis-Bacon Act;
    (ii) It is a contract for services covered by the Service Contract 
Act;
    (iii) It is a contract for concessions, including any concessions 
contract excluded from coverage under the Service Contract Act by 
Department of Labor regulations at Sec. 4.133(b); or
    (iv) It is a contract in connection with Federal property or lands 
and related to offering services for Federal employees, their 
dependents, or the general public; and
    (2) The wages of employees performing on or in connection with such 
contract are governed by the Davis-Bacon Act, the Service Contract Act, 
or the Fair Labor Standards Act, including employees who qualify for an 
exemption from the Fair Labor Standards Act's minimum wage and overtime 
provisions.
    (b) For contracts covered by the Service Contract Act or the Davis-
Bacon Act, this part applies to prime contracts only at the thresholds 
specified in those statutes. For procurement contracts where employees' 
wages are governed by the Fair Labor Standards Act, this part applies 
when the prime contract exceeds the micro-purchase threshold, as defined 
in 41 U.S.C. 1902(a). For all other prime contracts covered by Executive 
Order 13706 and this part and for all subcontracts awarded under prime 
contracts covered by Executive Order 13706 and this part, this part 
applies regardless of the value of the contract.
    (c) This part only applies to contracts with the Federal Government 
requiring performance in whole or in part within the United States. If a 
contract with the Federal Government is to be performed in part within 
and in part outside the United States and is otherwise covered by the 
Executive Order and this part, the requirements of the Order and this 
part would apply with respect to that part of the contract that is 
performed within the United States.
    (d) This part does not apply to contracts for the manufacturing or 
furnishing of materials, supplies, articles, or equipment to the Federal 
Government, including those that are subject to the Walsh-Healey Public 
Contracts Act, 41 U.S.C. 6501 et seq.



Sec. 13.4  Exclusions.

    (a) Grants. The requirements of this part do not apply to grants 
within the meaning of the Federal Grant and Cooperative Agreement Act, 
as amended, 31 U.S.C. 6301 et seq.
    (b) Contracts and agreements with and grants to Indian Tribes. This 
part does not apply to contracts and agreements with and grants to 
Indian Tribes under the Indian Self-Determination and Education 
Assistance Act, as amended, 25 U.S.C. 450 et seq.
    (c) Procurement contracts for construction that are excluded from 
coverage of the Davis-Bacon Act. Procurement contracts for construction 
that are not covered by the Davis-Bacon Act are not subject to this 
part.
    (d) Contracts for services that are exempted from coverage under the 
Service Contract Act. Service contracts, except for those expressly 
covered by Sec. 13.3(a)(1)(iii) or (iv), that are exempt from coverage 
of the Service Contract Act pursuant to its statutory language at 41 
U.S.C. 6702(b) or its implementing regulations, including those at 
Sec. 4.115 through 4.122 and Sec. 4.123(d) and (e), are not subject to 
this part.
    (e) Employees performing in connection with covered contracts for 
less than 20 percent of their work hours in a given workweek. The 
accrual requirements of this part do not apply to employees performing 
in connection with covered contracts, i.e., those employees who perform 
work duties necessary to the performance of the contract but who are not 
directly engaged in performing the specific work called for by the 
contract, who spend less than 20 percent of their hours worked in a 
particular workweek performing in connection with such contracts. This 
exclusion is inapplicable to employees performing on covered contracts, 
i.e., those employees directly engaged in performing

[[Page 210]]

the specific work called for by the contract, at any point during the 
workweek. This exclusion is also inapplicable to employees performing in 
connection with covered contracts with respect to any workweek in which 
the employees spend 20 percent or more of their hours worked performing 
in connection with a covered contract.
    (f) Employees whose covered work is governed by a collective 
bargaining agreement that already provides 56 hours of paid sick time. 
If a collective bargaining agreement ratified before September 30, 2016 
applies to an employee's work performed on or in connection with a 
covered contract and provides the employee with at least 56 hours (or 7 
days, if the agreement refers to days rather than hours) of paid sick 
time (or paid time off that may be used for reasons related to sickness 
or health care) each year, the requirements of the Executive Order and 
this part do not apply to the employee until the earlier of the date the 
agreement terminates or January 1, 2020. If a collective bargaining 
agreement ratified before September 30, 2016 applies to an employee's 
work performed on or in connection with a covered contract and provides 
the employee with paid sick time (or paid time off that may be used for 
reasons related to sickness or health care) each year, but the amount of 
such leave provided under the agreement is less than 56 hours (or 7 
days, if the agreement refers to days rather than hours), the 
requirements of the Executive Order and this part do not apply to the 
employee until the earlier of the date the agreement terminates or 
January 1, 2020, provided that each year the contractor provides covered 
employees with the difference between 56 hours (or 7 days) and the 
amount provided under the existing agreement in a manner consistent with 
either the Executive Order and this part or the terms and conditions of 
the collective bargaining agreement.



Sec. 13.5  Paid sick leave for Federal contractors and subcontractors.

    (a) Accrual. (1) A contractor shall permit an employee to accrue not 
less than 1 hour of paid sick leave for every 30 hours worked on or in 
connection with a covered contract. A contractor shall aggregate an 
employee's hours worked on or in connection with all covered contracts 
for that contractor for purposes of paid sick leave accrual.
    (i) Hours worked has the same meaning for purposes of Executive 
Order 13706 and this part as it does under the Fair Labor Standards Act, 
as set forth in 29 CFR part 785. To properly exclude time spent on non-
covered work from an employee's hours worked that count toward the 
accrual of paid sick leave, a contractor must accurately identify in its 
records the employee's covered and non-covered hours worked, or, if the 
employee performs work in connection with rather than on covered 
contracts, a contractor may estimate the portion of an employee's hours 
worked spent in connection with covered contracts provided the estimate 
is reasonable and based on verifiable information.
    (ii) A contractor shall calculate an employee's accrual of paid sick 
leave no less frequently than at the conclusion of each pay period or 
each month, whichever interval is shorter. A contractor need not allow 
an employee to accrue paid sick leave in increments smaller than 1 hour 
for completion of any fraction of 30 hours worked. Any such fraction of 
hours worked shall be added to hours worked for the same contractor in 
subsequent pay periods to reach the next 30 hours worked provided that 
the next pay period in which the employee performs on or in connection 
with a covered contract occurs within the same accrual year.
    (iii) If a contractor is not obligated by the Service Contract Act, 
Davis-Bacon Act, or Fair Labor Standards Act to keep records of an 
employee's hours worked, such as because the employee is employed in a 
bona fide executive, administrative, or professional capacity as those 
terms are defined in 29 CFR part 541, the contractor may, as to that 
employee, calculate paid sick leave accrual by tracking the employee's 
actual hours worked or by using the assumption that the employee works 
40 hours on or in connection with a covered contract in each workweek. 
If such an employee regularly works fewer than 40 hours per week on or 
in connection with covered contracts, whether because the employee's 
time is split between covered and non-

[[Page 211]]

covered contracts or because the employee has a part-time schedule, the 
contractor may allow the employee to accrue paid sick leave based on the 
employee's typical number of hours worked on or in connection with 
covered contracts per workweek provided the contractor has probative 
evidence to support the number it uses or, if the employee performs work 
in connection with rather than on covered contracts, a contractor may 
estimate the employee's typical number of hours worked in connection 
with covered contracts per workweek provided the estimate is reasonable 
and based on verifiable information.
    (2) A contractor shall inform an employee, in writing, of the amount 
of paid sick leave that the employee has accrued but not used no less 
than once each pay period or each month, whichever interval is shorter, 
as well as upon a separation from employment and upon reinstatement of 
paid sick leave pursuant to paragraph (b)(4) of this section. A 
contractor's existing procedure for informing employees of their 
available leave, such as notification accompanying each paycheck or an 
online system an employee can check at any time, may be used to satisfy 
or partially satisfy these requirements provided it is written 
(including electronically, if the contractor customarily corresponds 
with or makes information available to its employees by electronic 
means).
    (3) A contractor may choose to provide an employee with at least 56 
hours of paid sick leave at the beginning of each accrual year rather 
than allowing the employee to accrue such leave based on hours worked 
over time.
    (i) If a contractor chooses to use the option described in this 
paragraph, the contractor need not comply with the accrual requirements 
described in paragraph (a)(1) of this section. The contractor must, 
however, allow carryover of paid sick leave as required by paragraph 
(b)(2) of this section, and although the contractor may limit the amount 
of paid sick leave an employee may carry over to no less than 56 hours, 
the contractor may not limit the amount of paid sick leave an employee 
has available for use at any point as is otherwise permitted by 
paragraph (b)(3) of this section.
    (ii) If a contractor chooses to use the option described in this 
paragraph and the contractor hires an employee or newly assigns the 
employee to work on or in connection with a covered contract after the 
beginning of the accrual year, the contractor may provide the employee 
with a prorated amount of paid sick leave based on the number of pay 
periods remaining in the accrual year.
    (iii) A contractor may use the option described in this paragraph as 
to any or all of its employees in any or all accrual years.
    (b) Maximum accrual, carryover, reinstatement, and payment for 
unused leave. (1) A contractor may limit the amount of paid sick leave 
an employee is permitted to accrue to not less than 56 hours in each 
accrual year. An accrual year is a 12-month period beginning on the date 
an employee's work on or in connection with a covered contract began or 
any other fixed date chosen by the contractor, such as the date a 
covered contract began, the date the contractor's fiscal year begins, a 
date relevant under State law, or the date a contractor uses for 
determining employees' leave entitlements under the FMLA pursuant to 
Sec. 825.200 of this title. A contractor may choose its accrual year but 
must use a consistent option for all, or across similarly situated 
groups of, employees and may not select or change any employee's accrual 
year in order to avoid the paid sick leave requirements of Executive 
Order 13706 and this part.
    (2) Paid sick leave shall carry over from one accrual year to the 
next. Paid sick leave carried over from the previous accrual year shall 
not count toward any limit the contractor sets on annual accrual.
    (3) A contractor may limit the amount of paid sick leave an employee 
is permitted to have available for use at any point to not less than 56 
hours. Accordingly, even if an employee has accrued fewer than 56 hours 
of paid sick leave since the beginning of the accrual year, the employee 
need only be permitted to accrue additional paid sick leave if the 
employee has fewer than 56 hours available for use.

[[Page 212]]

    (4) Paid sick leave shall be reinstated for employees rehired by the 
same contractor within 12 months after a job separation. This 
reinstatement requirement applies whether the employee leaves and 
returns to a job on or in connection with a single covered contract or 
works for a single contractor on or in connection with more than one 
covered contract, regardless of whether the employee remains employed by 
the contractor in between periods of working on covered contracts.
    (5) Nothing in Executive Order 13706 or this part shall require a 
contractor to make a financial payment to an employee for accrued paid 
sick leave that has not been used upon a separation from employment. If 
a contractor nevertheless makes such a payment in an amount equal to or 
greater than the value of the pay and benefits the employee would have 
received pursuant to paragraph (c)(3) of this section had the employee 
used the paid sick leave, the contractor is relieved of the obligation 
to reinstate an employee's accrued paid sick leave upon rehiring the 
employee within 12 months of the separation pursuant to paragraph (b)(4) 
of this section.
    (c) Use. (1) Subject to the conditions described in paragraphs (d) 
and (e) of this section and the amount of paid sick leave the employee 
has available for use, a contractor must permit an employee to use paid 
sick leave to be absent from work for that contractor during time the 
employee would have been performing work on or in connection with a 
covered contract or, if the contractor estimates the employee's hours 
worked in connection with such contracts for purposes of accrual, during 
any work time because of:
    (i) A physical or mental illness, injury, or medical condition of 
the employee;
    (ii) Obtaining diagnosis, care, or preventive care from a health 
care provider by the employee;
    (iii) Caring for the employee's child, parent, spouse, domestic 
partner, or any other individual related by blood or affinity whose 
close association with the employee is the equivalent of a family 
relationship who has any of the conditions or needs for diagnosis, care, 
or preventive care referred to in paragraphs (c)(1)(i) or (ii) of this 
section or is otherwise in need of care; or
    (iv) Domestic violence, sexual assault, or stalking, if the time 
absent from work is for the purposes otherwise described in paragraphs 
(c)(1)(i) or (ii) of this section or to obtain additional counseling, 
seek relocation, seek assistance from a victim services organization, 
take related legal action, including preparation for or participation in 
any related civil or criminal legal proceeding, or assist an individual 
related to the employee as described in paragraph (c)(1)(iii) of this 
section in engaging in any of these activities.
    (2) A contractor shall account for an employee's use of paid sick 
leave in increments of no greater than 1 hour.
    (i) A contractor may not reduce an employee's accrued paid sick 
leave by more than the amount of time the employee is actually absent 
from work, and a contractor may not require an employee to use more 
leave than is necessary to address the circumstances that precipitated 
the need for the leave, provided that the leave is counted using an 
increment of no greater than 1 hour.
    (ii) The amount of paid sick leave used may not exceed the hours an 
employee would have worked if the need for leave had not arisen.
    (iii) If it is physically impossible for an employee using paid sick 
leave to commence or end work mid-way through a shift, such as if a 
flight attendant or a railroad conductor is scheduled to work aboard an 
airplane or train, or a laboratory employee is unable to enter or leave 
a sealed ``clean room'' during a certain period of time, and no 
equivalent position is available, the entire period that the employee is 
forced to be absent constitutes paid sick leave. The period of the 
physical impossibility is limited to the period during which the 
contractor is unable to permit the employee to work prior to the use of 
paid sick leave or return the employee to the same or an equivalent 
position due to the physical impossibility after the use of paid sick 
leave.
    (3) A contractor shall provide to an employee using paid sick leave 
the

[[Page 213]]

same regular pay and benefits the employee would have received had the 
employee not been absent from work. Regular pay means payments that 
would be included in the calculation of the employee's regular rate for 
hours worked under the Fair Labor Standards Act as set forth in 29 CFR 
part 778.
    (4) A contractor may not limit the amount of paid sick leave an 
employee may use per year or at once on any basis other than the amount 
of paid sick leave an employee has available.
    (5) An employee is encouraged to make a reasonable effort to 
schedule preventive care or another foreseeable need to use paid sick 
leave to suit the needs of both the contractor and employee, and a 
contractor may ask an employee to make a reasonable effort to schedule 
foreseeable paid sick leave so as to not disrupt unduly the contractor's 
operations, but a contractor may not make an employee's use of paid sick 
leave contingent on the employee's finding a replacement worker to cover 
any work time to be missed or on the fulfillment of the contractor's 
operational needs.
    (d) Request for leave. (1) A contractor shall permit an employee to 
use any or all of the employee's available paid sick leave upon the oral 
or written request of an employee that includes information sufficient 
to inform the contractor that the employee is seeking to be absent from 
work for a purpose described in paragraph (c)(1) of this section and, to 
the extent reasonably feasible, the anticipated duration of the leave.
    (i) An employee's request to use paid sick leave need not include a 
specific reference to the Executive Order or this part or even use the 
words ``sick leave'' or ``paid sick leave,'' and a contractor may not 
require an employee to provide extensive or detailed information about 
the need to be absent from work or the employee's family or family-like 
relationship with an individual for whom the employee is requesting to 
care.
    (ii) Although an employee shall make a good faith effort to provide 
a reasonable estimate of the length of the requested absence from work, 
a contractor shall permit the employee to return to work earlier, or 
continue to use available paid sick leave for longer, than anticipated.
    (iii) The employee's request shall be directed to the appropriate 
personnel pursuant to a contractor's policy or, in the absence of a 
formal policy, any personnel who typically receive requests for other 
types of leave or otherwise address scheduling issues on behalf of the 
contractor.
    (iv) The contractor shall maintain the confidentiality of any 
medical or other personal information contained in an employee's request 
to use paid sick leave as required by Sec. 13.25(d).
    (2) If the need for leave is foreseeable, the employee's request 
shall be made at least 7 calendar days in advance. If the employee is 
unable to request paid sick leave at least 7 calendar days in advance, 
the request shall be made as soon as is practicable. When an employee 
becomes aware of a need to use paid sick leave less than 7 calendar days 
in advance, it should typically be practicable for the employee to make 
a request for leave either the day the employee becomes aware of the 
need to use paid sick leave or the next business day. In all cases, 
however, the determination of when an employee could practicably make a 
request must take into account the individual facts and circumstances.
    (3)(i) A contractor may communicate its grant of a request to use 
paid sick leave either orally or in writing (including electronically, 
if the contractor customarily corresponds with or makes information 
available to its employees by such means).
    (ii) A contractor shall communicate any denial of a request to use 
paid sick leave in writing (including electronically, if the contractor 
customarily corresponds with or makes information available to its 
employees by such means), with an explanation for the denial. Denial is 
appropriate if, for example, the employee did not provide sufficient 
information about the need for paid sick leave; the reason given is not 
consistent with the uses of paid sick leave described in paragraph 
(c)(1) of this section; the employee did not indicate when the need 
would arise; the employee has not accrued, and will not have accrued by 
the date of leave anticipated in the request, a sufficient

[[Page 214]]

amount of paid sick leave to cover the request (in which case, if the 
employee will have any paid sick leave available for use, only a partial 
denial is appropriate); or the request is to use paid sick leave during 
time the employee is scheduled to be performing non-covered work. If the 
denial is based on insufficient information provided in the request, 
such as if the employee did not state the time of an appointment with a 
health care provider, the contractor must permit the employee to submit 
a new, corrected request. If the denial is based on an employee's 
request to use paid sick leave during time she is scheduled to be 
performing non-covered work, the denial must be supported by records 
adequately segregating the employee's time spent on covered and non-
covered contracts.
    (iii) A contractor shall respond to any request to use paid sick 
leave as soon as is practicable after the request is made. Although the 
determination of when it is practicable for a contractor to provide a 
response will take into account the individual facts and circumstances, 
it should in many circumstances be practicable for the contractor to 
respond to a request immediately or within a few hours. In some 
instances, however, such as if it is unclear at the time of the request 
whether the employee will be working on or in connection with a covered 
or non-covered contract at the time for which paid sick leave is 
requested, as soon as practicable could mean within a day or no longer 
than within a few days.
    (e) Certification or documentation for leave of 3 or more 
consecutive full workdays. (1)(i) A contractor may require certification 
issued by a health care provider to verify the need for paid sick leave 
used for a purpose described in paragraphs (c)(1)(i), (ii), or (iii) of 
this section only if the employee is absent for 3 or more consecutive 
full workdays. The contractor shall protect the confidentiality of any 
certification as required by Sec. 13.25(d).
    (ii) A contractor may only require documentation from an appropriate 
individual or organization to verify the need for paid sick leave used 
for a purpose described in paragraph (c)(1)(iv) of this section only if 
the employee is absent for 3 or more consecutive full workdays. The 
source of such documentation may be any person involved in providing or 
assisting with the care, counseling, relocation, assistance of a victim 
services organization, or related legal action, such as, but not limited 
to, a health care provider, counselor, representative of a victim 
services organization, attorney, clergy member, family member, or close 
friend. Self-certification is also permitted. The contractor may only 
require that such documentation contain the minimum necessary 
information establishing a need for the employee to be absent from work. 
The contractor shall not disclose any verification information and shall 
maintain confidentiality about the domestic abuse, sexual assault, or 
stalking, as required by Sec. 13.25(d).
    (2) If certification or documentation is to verify the illness, 
injury, or condition, need for diagnosis, care, or preventive care, or 
activity related to domestic violence, sexual assault, or stalking of an 
individual related to the employee as described in paragraph (c)(1)(iii) 
of this section, a contractor may also require the employee to provide 
reasonable documentation or a statement of the family or family-like 
relationship. This documentation may take the form of a simple written 
statement from the employee or could be a legal or other document 
proving the relationship, such as a birth certificate or court order.
    (3)(i) A contractor may only require certification or documentation 
if the contractor informs an employee before the employee returns to 
work that certification or documentation will be required to verify the 
use of paid sick leave if the employee is absent for 3 or more 
consecutive full workdays. The contractor may inform an employee of this 
requirement each time the employee requests to use or does use paid sick 
leave, or the contractor may inform employees of a general policy to 
require certification or documentation for absences of 3 or more 
consecutive full workdays if it does so in a manner reasonably 
calculated to provide actual notice of the requirement to employees.

[[Page 215]]

    (ii) A contractor may require the employee to provide certification 
or documentation within 30 days of the first day of the 3 or more 
consecutive full workdays of paid sick leave but may not set a shorter 
deadline for its submission.
    (iii) While a contractor is waiting for or reviewing certification 
or documentation, it must treat the employee's otherwise proper request 
for 3 or more consecutive full workdays of paid sick leave as valid. If 
the employee provides certification or documentation that is 
insufficient to verify the employee's need for paid sick leave, the 
contractor shall notify the employee of the deficiency and allow the 
employee at least 5 days to provide new or supplemental certification or 
documentation. If after 30 days the employee has not provided any 
certification or documentation, or if after the 5 or more days allowed 
for resubmission the employee has either provided no new or supplemental 
certification or documentation or the new certification or documentation 
is still insufficient to verify the employee's need for paid sick leave, 
the contractor may, within 10 calendar days of the employee's deadline 
for providing sufficient certification or documentation, retroactively 
deny the employee's request to use paid sick leave. In such 
circumstances, the contractor may recover the value of the pay and 
benefits the employee received but to which the employee was not 
entitled, including through deduction from any sums due to the employee 
(e.g., unpaid wages, vacation pay, profit sharing, etc.), provided such 
deductions do not otherwise violate applicable Federal, State, or local 
wage payment or other laws.
    (4) A contractor may contact the health care provider or other 
individual who created or signed the certification or documentation only 
for purposes of authenticating the document or clarifying its contents. 
The contractor may not request additional details about the medical or 
other condition referenced, seek a second opinion, or otherwise question 
the substance of the certification. To make such contact, the contractor 
must use a human resources professional, a leave administrator, or a 
management official. The employee's direct supervisor may not contact 
the employee's health care provider unless there is no other appropriate 
individual who can do so. The requirements of the Health Insurance 
Portability and Accountability Act (HIPAA) Privacy Rule, set forth at 45 
CFR parts 160 and 164, must be satisfied when individually identifiable 
health information of an employee is shared with a contractor by a 
HIPAA-covered health care provider.
    (f) Interaction with other laws and paid time off policies. (1) 
General. Nothing in Executive Order 13706 or this part shall excuse 
noncompliance with or supersede any applicable Federal or State law, any 
applicable law or municipal ordinance, or a collective bargaining 
agreement requiring greater paid sick leave or leave rights than those 
established under the Executive Order and this part.
    (2) SCA and DBA requirements. (i) Paid sick leave required by 
Executive Order 13706 and this part is in addition to a contractor's 
obligations under the Service Contract Act and Davis-Bacon Act. A 
contractor may not receive credit toward its prevailing wage or fringe 
benefit obligations under those Acts for any paid sick leave provided in 
satisfaction of the requirements of Executive Order 13706 and this part.
    (ii) A contractor may count the value of any paid sick time provided 
in excess of the requirements of Executive Order 13706 and this part 
(and any other law) toward its obligations under the Service Contract 
Act or Davis-Bacon Act in keeping with the requirements of those Acts.
    (3) FMLA. A contractor's obligations under the Executive Order and 
this part have no effect on its obligations to comply with, or ability 
to act pursuant to, the Family and Medical Leave Act. Paid sick leave 
may be substituted for (that is, may run concurrently with) unpaid FMLA 
leave under the same conditions as other paid time off pursuant to 
Sec. 825.207 of this title. As to time off that is designated as FMLA 
leave and for which an employee uses paid sick leave, all notices and 
certifications that satisfy the FMLA requirements set forth at 
Sec. 825.300 through

[[Page 216]]

300.308 of this title will satisfy the request for leave and 
certification requirements of paragraphs (d) and (e) of this section.
    (4) State and local paid sick time laws. A contractor's compliance 
with a State or local law requiring that employees be provided with paid 
sick time does not excuse the contractor from compliance with any of its 
obligations under the Executive Order 13706 or this part. A contractor 
may, however, satisfy its obligations under the Order and this part by 
providing paid sick time that fulfills the requirements of a State or 
local law provided that the paid sick time is accrued and may be used in 
a manner that meets or exceeds all of the requirements of the Order and 
this part including but not limited to the accrual and use requirements 
in this section and the prohibitions on interference and discrimination 
in Sec. 13.6. Where the requirements of an applicable State or local law 
and the Order and this part differ, satisfying both will require a 
contractor to comply with the requirement that is more generous to 
employees.
    (5) Paid time off policies. (i) The paid sick leave requirements of 
Executive Order 13706 and this part need not have any effect on a 
contractor's voluntary paid time off policy, whether provided pursuant 
to a collective bargaining agreement or otherwise.
    (ii) A contractor's existing paid time off policy (if provided in 
addition to the fulfillment of Service Contract Act or Davis-Bacon Act 
obligations, if applicable) will satisfy the requirements of the 
Executive Order and this part if the paid time off is made available to 
all employees described in Sec. 13.3(a)(2) (other than those excluded by 
Sec. 13.4(e)); may be used for at least all of the purposes described in 
paragraph (c)(1) of this section; is provided in a manner and an amount 
sufficient to comply with the rules and restrictions regarding the 
accrual of paid sick leave set forth in paragraph (a) of this section 
and regarding maximum accrual, carryover, reinstatement, and payment for 
unused leave set forth in paragraph (b) of this section; is provided 
pursuant to policies sufficient to comply with the rules and 
restrictions regarding use of paid sick leave set forth in paragraph (c) 
of this section, regarding requests for leave set forth in paragraph (d) 
of this section, and regarding certification and documentation set forth 
in paragraph (e) of this section, at least with respect to any paid time 
off used for the purposes described in paragraph (c)(1) of this section; 
and is protected by the prohibitions against interference, 
discrimination, and recordkeeping violations described in Sec. 13.6 and 
the prohibition against waiver of rights described in Sec. 13.7, at 
least with respect to any paid time off used for the purposes described 
in paragraph (c)(1) of this section.
    (iii) A contractor satisfying the requirements of the Executive 
Order and this part with a paid time off policy that provides more than 
56 hours of leave per accrual year may choose to either provide all paid 
time off as described in paragraph (f)(5)(ii) of this section or track, 
and make and maintain records reflecting, the amount of paid time off an 
employee uses for the purposes described in paragraph (c)(1) of this 
section, in which case the contractor need only provide, for each 
accrual year, up to 56 hours of paid time off the employee requests to 
use for such purposes in compliance with the Order and this part.



Sec. 13.6  Prohibited acts.

    (a) Interference. (1) A contractor may not in any manner interfere 
with an employee's accrual or use of paid sick leave as required by 
Executive Order 13706 or this part.
    (2) Interference includes, but is not limited to, miscalculating the 
amount of paid sick leave an employee has accrued, denying or 
unreasonably delaying a response to a proper request to use paid sick 
leave, discouraging an employee from using paid sick leave, reducing an 
employee's accrued paid sick leave by more than the amount of such leave 
used, transferring the employee to work on non-covered contracts to 
prevent the accrual or use of paid sick leave, disclosing confidential 
information contained in certification or other documentation provided 
to verify the need to use paid sick leave, or making the use of paid 
sick leave contingent on the employee's finding a

[[Page 217]]

replacement worker or the fulfillment of the contractor's operational 
needs.
    (b) Discrimination. (1) A contractor may not discharge or in any 
other manner discriminate against any employee for:
    (i) Using, or attempting to use, paid sick leave as provided for 
under Executive Order 13706 and this part;
    (ii) Filing any complaint, initiating any proceeding, or otherwise 
asserting any right or claim under Executive Order 13706 or this part;
    (iii) Cooperating in any investigation or testifying in any 
proceeding under Executive Order 13706 or this part; or
    (iv) Informing any other person about his or her rights under 
Executive Order 13706 or this part.
    (2) Discrimination includes, but is not limited to, a contractor's 
considering any of the activities described in paragraph (b)(1) of this 
section as a negative factor in employment actions, such as hiring, 
promotions, or disciplinary actions, or a contractor's counting paid 
sick leave under a no fault attendance policy.
    (c) Recordkeeping. A contractor's failure to make and maintain or to 
make available to authorized representatives of the Wage and Hour 
Division records for inspection, copying, and transcription as required 
by Sec. 13.25, or any other failure to comply with the requirements of 
Sec. 13.25, constitutes a violation of Executive Order 13706, this part, 
and the underlying contract.



Sec. 13.7  Waiver of rights.

    Employees cannot waive, nor may contractors induce employees to 
waive, their rights under Executive Order 13706 or this part.



Sec. 13.8  Multiemployer plans or other funds, plans, or programs.

    (a) A contractor may fulfill its obligations under Executive Order 
13706 and this part jointly with other contractors--that is, as though 
all of the contractors are a single contractor--through a multiemployer 
plan that provides paid sick leave in compliance with the rules and 
requirements of Executive Order 13706 and this part. Regardless of what 
functions the plan performs, each contractor remains responsible for any 
violation of the Order or this part that occurs during its employment of 
the employee.
    (b) Nothing in this part prohibits a contractor from providing paid 
sick leave through a fund, plan, or program. Regardless of the manner in 
which a contractor provides paid sick leave or what functions any fund, 
plan, or program performs, the contractor remains responsible for any 
violation of the Order or this part with respect to any of its 
employees.



                Subpart B_Federal Government Requirements



Sec. 13.11  Contracting agency requirements.

    (a) Contract clause. The contracting agency shall include the 
Executive Order paid sick leave contract clause set forth in Appendix A 
of this part in all covered contracts and solicitations for such 
contracts, as described in Sec. 13.3, except for procurement contracts 
subject to the FAR. The required contract clause directs, as a condition 
of payment, that all employees performing work on or in connection with 
covered contracts shall be provided paid sick leave as required by 
Executive Order 13706 and this part. For procurement contracts subject 
to the FAR, contracting agencies must use the clause set forth in the 
FAR developed to implement this rule. Such clause will accomplish the 
same purposes as the clause set forth in Appendix A and be consistent 
with the requirements set forth in this rule.
    (b) Failure to include the contract clause. Where the Department of 
Labor or the contracting agency discovers or determines, whether before 
or subsequent to a contract award, that a contracting agency made an 
erroneous determination that Executive Order 13706 and this part did not 
apply to a particular contract and/or failed to include the applicable 
contract clause in a contract to which the Executive Order and this part 
apply, the contracting agency, on its own initiative or within 15 
calendar days of notification by an authorized representative of the 
Department of Labor, shall incorporate the contract clause in the 
contract retroactive to commencement of performance under the contract

[[Page 218]]

through the exercise of any and all authority that may be needed 
(including, where necessary, its authority to negotiate or amend, its 
authority to pay any necessary additional costs, and its authority under 
any contract provision authorizing changes, cancellation, and 
termination).
    (c) Withholding. A contracting officer shall, upon his or her own 
action or upon written request of the Administrator, withhold or cause 
to be withheld from the prime contractor under the covered contract or 
any other Federal contract with the same prime contractor, so much of 
the accrued payments or advances as may be considered necessary to pay 
employees the full amount owed to compensate for any violation of 
Executive Order 13706 or this part. In the event of any such violation, 
the agency may, after authorization or by direction of the Administrator 
and written notification to the contractor, take action to cause 
suspension of any further payment, advance, or guarantee of funds until 
such violations have ceased. Additionally, any failure to comply with 
the requirements of Executive Order 13706 or this part may be grounds 
for termination of the right to proceed with the contract work. In such 
event, the contracting agency may enter into other contracts or 
arrangements for completion of the work, charging the contractor in 
default with any additional cost.
    (d) Suspending payment. A contracting officer shall, upon his or her 
own action or upon the direction of the Administrator and notification 
of the contractor, take action to cause suspension of any further 
payment, advance, or guarantee of funds to a contractor that has failed 
to make available for inspection, copying, and transcription any of the 
records identified in Sec. 13.25.
    (e) Actions on complaints--(1) Reporting time frame. The contracting 
agency shall forward all information listed in paragraph (e)(2) of this 
section to the Office of Government Contracts Enforcement, Wage and Hour 
Division, U.S. Department of Labor, 200 Constitution Avenue NW., 
Washington, DC 20210 within 14 calendar days of receipt of a complaint 
alleging contractor noncompliance with Executive Order 13706 or this 
part or within 14 calendar days of being contacted by the Wage and Hour 
Division regarding any such complaint.
    (2) Report contents. The contracting agency shall forward to the 
Office of Government Contracts Enforcement, Wage and Hour Division, U.S. 
Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210 
any:
    (i) Complaint of contractor noncompliance with Executive Order 13706 
or this part;
    (ii) Available statements by the worker, contractor, or any other 
person regarding the alleged violation;
    (iii) Evidence that the Executive Order paid sick leave contract 
clause was included in the contract;
    (iv) Information concerning known settlement negotiations between 
the parties, if applicable; and
    (v) Any other relevant facts known to the contracting agency or 
other information requested by the Wage and Hour Division.



Sec. 13.12  Department of Labor requirements.

    (a) Notice--(1) Wage Determinations OnLine Web site. The 
Administrator will publish and maintain on Wage Determinations OnLine 
(WDOL), http://www.wdol.gov, or any successor site, a notice that 
Executive Order 13706 creates a requirement to allow employees 
performing work on or in connection with contracts covered by Executive 
Order 13706 and this part to accrue and use paid sick leave, as well as 
an indication of where to find more complete information about that 
requirement.
    (2) Wage determinations. The Administrator will publish on all wage 
determinations issued under the Davis-Bacon Act and the Service Contract 
Act a notice that Executive Order 13706 creates a requirement to allow 
employees performing work on or in connection with contracts covered by 
Executive Order 13706 and this part to accrue and use paid sick leave, 
as well as an indication of where to find more complete information 
about that requirement.
    (b) Notification to a contractor of the withholding of funds. If the 
Administrator requests that a contracting

[[Page 219]]

agency withhold funds from a contractor pursuant to Sec. 13.11(c), or 
suspend payment, advance, or guarantee of funds pursuant to 
Sec. 13.11(d), the Administrator and/or contracting agency shall notify 
the affected prime contractor of the Administrator's request to the 
contracting agency.



                    Subpart C_Contractor Requirements



Sec. 13.21  Contract clause.

    (a) The contractor, as a condition of payment, shall abide by the 
terms of the applicable Executive Order paid sick leave contract clause 
referred to in Sec. 13.11(a).
    (b) The contractor shall include in any covered subcontracts the 
applicable Executive Order paid sick leave contract clause referred to 
in Sec. 13.11(a) and shall require, as a condition of payment, that the 
subcontractor include the contract clause in any lower-tier 
subcontracts. The prime contractor and any upper-tier contractor shall 
be responsible for the compliance by any subcontractor or lower-tier 
subcontractor with the requirements of Executive Order 13706 and this 
part, whether or not the contract clause was included in the 
subcontract.



Sec. 13.22  Paid sick leave.

    The contractor shall allow all employees performing work on or in 
connection with a covered contract to accrue and use paid sick leave as 
required by Executive Order 13706 and this part.



Sec. 13.23  Deductions.

    The contractor may make deductions from the pay and benefits of an 
employee who is using paid sick leave only if such deduction qualifies 
as a:
    (a) Deduction required by Federal, State, or local law, such as 
Federal or State withholding of income taxes;
    (b) Deduction for payments made to third parties pursuant to court 
order;
    (c) Deduction directed by a voluntary assignment of the employee or 
his or her authorized representative;
    (d) Deduction for the reasonable cost or fair value, as determined 
by the Administrator, of furnishing such employee with ``board, lodging, 
or other facilities,'' as defined in 29 U.S.C. 203(m) and 29 CFR part 
531;
    (e) Deduction, to the extent permitted by law, for the purpose of 
recouping pay and benefits provided for paid sick leave as to which the 
contractor retroactively denied the employee's request pursuant to 
Sec. 13.5(e)(3)(iii) or because the contractor approved the use of the 
paid sick leave based on a fraudulent request.



Sec. 13.24  Anti-kickback.

    All paid sick leave used by employees performing on or in connection 
with covered contracts must be paid free and clear and without 
subsequent deduction (except as set forth in Sec. 13.23), rebate, or 
kickback on any account. Kickbacks directly or indirectly to the 
contractor or to another person for the contractor's benefit for the 
whole or part of the paid sick leave are prohibited.



Sec. 13.25  Records to be kept by contractors.

    (a) The contractor and each subcontractor performing work subject to 
Executive Order 13706 and this part shall make and maintain during the 
course of the covered contract, and preserve for no less than 3 years 
thereafter, records containing the information specified in paragraphs 
(a)(1) through (15) of this section for each employee and shall make 
them available for inspection, copying, and transcription by authorized 
representatives of the Wage and Hour Division of the U.S. Department of 
Labor:
    (1) Name, address, and Social Security number of each employee;
    (2) The employee's occupation(s) or classification(s);
    (3) The rate or rates of wages paid (including all pay and benefits 
provided);
    (4) The number of daily and weekly hours worked;
    (5) Any deductions made;
    (6) The total wages paid (including all pay and benefits provided) 
each pay period;
    (7) A copy of notifications to employees of the amount of paid sick 
leave the employees have accrued as required under Sec. 13.5(a)(2);

[[Page 220]]

    (8) A copy of employees' requests to use paid sick leave, if in 
writing, or, if not in writing, any other records reflecting such 
employee requests;
    (9) Dates and amounts of paid sick leave used by employees (unless a 
contractor's paid time off policy satisfies the requirements of 
Executive Order 13706 and this part as described in Sec. 13.5(f)(5), 
leave must be designated in records as paid sick leave pursuant to 
Executive Order 13706);
    (10) A copy of any written responses to employees' requests to use 
paid sick leave, including explanations for any denials of such 
requests, as required under Sec. 13.5(d)(3);
    (11) Any records relating to the certification and documentation a 
contractor may require an employee to provide under Sec. 13.5(e), 
including copies of any certification or documentation provided by an 
employee;
    (12) Any other records showing any tracking of or calculations 
related to an employee's accrual and/or use of paid sick leave;
    (13) The relevant covered contract;
    (14) The regular pay and benefits provided to an employee for each 
use of paid sick leave; and
    (15) Any financial payment made for unused paid sick leave upon a 
separation from employment intended, pursuant to Sec. 13.5(b)(5), to 
relieve a contractor from the obligation to reinstate such paid sick 
leave as otherwise required by Sec. 13.5(b)(4).
    (b) Segregation of time. (1) If a contractor wishes to distinguish 
between an employee's covered and non-covered work (such as time spent 
performing work on or in connection with a covered contract versus time 
spent performing work on or in connection with non-covered contracts or 
time spent performing work on or in connection with a covered contract 
in the United States versus time spent performing work outside the 
United States, or to establish that time spent performing solely in 
connection with covered contracts constituted less than 20 percent of an 
employee's hours worked during a particular workweek), the contractor 
must keep records or other proof reflecting such distinctions. Only if 
the contractor adequately segregates the employee's time will time spent 
on non-covered work be excluded from hours worked counted toward the 
accrual of paid sick leave. Similarly, only if that contractor 
adequately segregates the employee's time may a contractor properly deny 
an employee's request to take leave under Sec. 13.5(d) on the ground 
that the employee was scheduled to perform non-covered work during the 
time she asked to use paid sick leave.
    (2) If a contractor estimates covered hours worked by an employee 
who performs work in connection with covered contracts pursuant to 
Sec. 13.5(a)(1)(i) or (iii), the contractor must keep records or other 
proof of the verifiable information on which such estimates are 
reasonably based. Only if the contractor relies on an estimate that is 
reasonable and based on verifiable information will an employee's time 
spent in connection with non-covered contracts be excluded from hours 
worked counted toward the accrual of paid sick leave. If a contractor 
estimates the amount of time an employee spends performing in connection 
with covered contracts, the contractor must permit the employee to use 
her paid sick leave during any work time for the contractor.
    (c) If a contractor is not obligated by the Service Contract Act, 
Davis-Bacon Act, or Fair Labor Standards Act to keep records of an 
employee's hours worked, such as because the employee is employed in a 
bona fide executive, administrative, or professional capacity as those 
terms are defined in 29 CFR part 541, and the contractor chooses to use 
the assumption permitted by Sec. 13.5(a)(1)(iii), the contractor is 
excused from the requirement in paragraph (a)(4) of this section to keep 
records of the employee's number of daily and weekly hours worked.
    (d)(1) Records relating to medical histories or domestic violence, 
sexual assault, or stalking, created by or provided to a contractor for 
purposes of Executive Order 13706, whether of an employee or an 
employee's child, parent, spouse, domestic partner, or other individual 
related by blood or affinity

[[Page 221]]

whose close association with the employee is the equivalent of a family 
relationship, shall be maintained as confidential records in separate 
files/records from the usual personnel files.
    (2) If the confidentiality requirements of the Genetic Information 
Nondiscrimination Act of 2008 (GINA), section 503 of the Rehabilitation 
Act of 1973, and/or the Americans with Disabilities Act (ADA) apply to 
medical information contained in records or documents that the 
contractor created or received in connection with compliance with the 
recordkeeping or other requirements of this part, the records and 
documents must also be maintained in compliance with the confidentiality 
requirements of the GINA, section 503 of the Rehabilitation Act of 1973, 
and/or ADA as described in Sec. 1635.9 of this title, 41 CFR 60-
741.23(d), and Sec. 1630.14(c)(1) of this title, respectively.
    (3) The contractor shall not disclose any documentation used to 
verify the need to use 3 or more consecutive days of paid sick leave for 
the purposes listed in Sec. 13.5(c)(1)(iv) (as described in 
Sec. 13.5(d)(2)) and shall maintain confidentiality about any domestic 
abuse, sexual assault, or stalking, unless the employee consents or when 
disclosure is required by law.
    (e) The contractor shall permit authorized representatives of the 
Wage and Hour Division to conduct interviews with employees at the 
worksite during normal working hours.
    (f) Nothing in this part limits or otherwise modifies the 
contractor's recordkeeping obligations, if any, under the Davis-Bacon 
Act, the Service Contract Act, the Fair Labor Standards Act, the Family 
and Medical Leave Act, Executive Order 13658, their implementing 
regulations, or other applicable law.



Sec. 13.26  Notice.

    (a) The contractor must notify all employees performing work on or 
in connection with a covered contract of the paid sick leave 
requirements of Executive Order 13706 and this part by posting a notice 
provided by the Department of Labor in a prominent and accessible place 
at the worksite so it may be readily seen by employees.
    (b) Contractors that customarily post notices to employees 
electronically may post the notice electronically, provided such 
electronic posting is displayed prominently on any Web site that is 
maintained by the contractor, whether external or internal, and 
customarily used for notices to employees about terms and conditions of 
employment.



Sec. 13.27  Timing of pay.

    The contractor shall compensate an employee for time during which 
the employee used paid sick leave no later than one pay period following 
the end of the regular pay period in which the paid sick leave was used.



                          Subpart D_Enforcement



Sec. 13.41  Complaints.

    (a) Any employee, contractor, labor organization, trade 
organization, contracting agency, or other person or entity that 
believes a violation of the Executive Order or this part has occurred 
may file a complaint with any office of the Wage and Hour Division. No 
particular form of complaint is required. A complaint may be filed 
orally or in writing. If the complainant is unable to file the complaint 
in English, the Wage and Hour Division will accept the complaint in any 
language.
    (b) It is the policy of the Department of Labor to protect the 
identity of its confidential sources and to prevent an unwarranted 
invasion of personal privacy. Accordingly, the identity of any 
individual who makes a written or oral statement as a complaint or in 
the course of an investigation, as well as portions of the statement 
which would reveal the individual's identity, shall not be disclosed in 
any manner to anyone other than Federal officials without the prior 
consent of the individual. Disclosure of such statements shall be 
governed by the provisions of the Freedom of Information Act, 5 U.S.C. 
552, 29 CFR part 70, and the Privacy Act of 1974, 5 U.S.C. 552a.



Sec. 13.42  Wage and Hour Division conciliation.

    After receipt of a complaint, the Administrator may seek to resolve 
the matter through conciliation.

[[Page 222]]



Sec. 13.43  Wage and Hour Division investigation.

    The Administrator may investigate possible violations of the 
Executive Order or this part either as the result of a complaint or at 
any time on his or her own initiative. As part of the investigation, the 
Administrator may conduct interviews with the relevant contractor, as 
well as the contractor's employees at the worksite during normal work 
hours; inspect the relevant contractor's records (including contract 
documents and payrolls, if applicable); make copies and transcriptions 
of such records; and require the production of any documentary or other 
evidence the Administrator deems necessary to determine whether a 
violation, including conduct warranting imposition of debarment, has 
occurred. Federal agencies and contractors shall cooperate with any 
authorized representative of the Department of Labor in the inspection 
of records, in interviews with employees, and in all aspects of 
investigations.



Sec. 13.44  Remedies and sanctions.

    (a) Interference. When the Administrator determines that a 
contractor has interfered with an employee's accrual or use of paid sick 
leave in violation of Sec. 13.6(a), the Administrator will notify the 
contractor and the relevant contracting agency of the interference and 
request that the contractor remedy the violation. If the contractor does 
not remedy the violation, the Administrator shall direct the contractor 
to provide any appropriate relief to the affected employee(s) in the 
investigative findings letter issued pursuant to Sec. 13.51. Such relief 
may include any pay and/or benefits denied or lost by reason of the 
violation; other actual monetary losses sustained as a direct result of 
the violation; or appropriate equitable or other relief. Payment of 
liquidated damages in an amount equaling any monetary relief may also be 
directed unless such amount is reduced by the Administrator because the 
violation was in good faith and the contractor had reasonable grounds 
for believing it had not violated the Order or this part. The 
Administrator may additionally direct that payments due on the contract 
or any other contract between the contractor and the Federal Government 
be withheld as may be necessary to provide any appropriate monetary 
relief. Upon the final order of the Secretary that monetary relief is 
due, the Administrator may direct the relevant contracting agency to 
transfer the withheld funds to the Department of Labor for disbursement.
    (b) Discrimination. When the Administrator determines that a 
contractor has discriminated against an employee in violation of 
Sec. 13.6(b), the Administrator will notify the contractor and the 
relevant contracting agency of the discrimination and request that the 
contractor remedy the violation. If the contractor does not remedy the 
violation, the Administrator shall direct the contractor to provide 
appropriate relief to the affected employee(s) in the investigative 
findings letter issued pursuant to Sec. 13.51. Such relief may include, 
but is not limited to, employment, reinstatement, promotion, restoration 
of leave, or lost pay and/or benefits. Payment of liquidated damages in 
an amount equaling any monetary relief may also be directed unless such 
amount is reduced by the Administrator because the violation was in good 
faith and the contractor had reasonable grounds for believing the 
contractor had not violated the Order or this part. The Administrator 
may additionally direct that payments due on the contract or any other 
contract between the contractor and the Federal Government be withheld 
as may be necessary to provide any appropriate monetary relief. Upon the 
final order of the Secretary that monetary relief is due, the 
Administrator may direct the relevant contracting agency to transfer the 
withheld funds to the Department of Labor for disbursement.
    (c) Recordkeeping. When a contractor fails to comply with the 
requirements of Sec. 13.25 in violation of Sec. 13.6(c), the 
Administrator will request that the contractor remedy the violation. If 
the contractor fails to produce required records upon request, the 
contracting officer, upon direction of an authorized representative of 
the Department of Labor, or under its own action, shall take such action 
as may be necessary to cause suspension of any further payment, advance, 
or guarantee of funds

[[Page 223]]

on the contract until such time as the violations are discontinued.
    (d) Debarment. Whenever a contractor is found by the Secretary to 
have disregarded its obligations under the Executive Order or this part, 
such contractor and its responsible officers, and any firm, corporation, 
partnership, or association in which the contractor or responsible 
officers have an interest, shall be ineligible to be awarded any 
contract or subcontract subject to the Executive Order for a period of 
up to 3 years from the date of publication of the name of the contractor 
or responsible officer on the excluded parties list currently maintained 
on the System for Award Management Web site, http://www.SAM.gov. Neither 
an order of debarment of any contractor or its responsible officers from 
further Government contracts nor the inclusion of a contractor or its 
responsible officers on a published list of noncomplying contractors 
under this section shall be carried out without affording the contractor 
or responsible officers an opportunity for a hearing before an 
Administrative Law Judge.
    (e) Civil actions to recover greater underpayments than those 
withheld. If the payments withheld under Sec. 13.11(c) are insufficient 
to reimburse all monetary relief due, or if there are no payments to 
withhold, the Department of Labor, following a final order of the 
Secretary, may bring an action against the contractor in any court of 
competent jurisdiction to recover the remaining amount. The Department 
of Labor shall, to the extent possible, pay any sums it recovers in this 
manner directly to the employees who suffered the violation(s) of 
Sec. 13.6(a) or (b). Any sum not paid to an employee because of 
inability to do so within 3 years shall be transferred into the Treasury 
of the United States as miscellaneous receipts.
    (f) Retroactive inclusion of contract clause. If a contracting 
agency fails to include the applicable contract clause in a contract to 
which the Executive Order applies, the contracting agency, on its own 
initiative or within 15 calendar days of notification by an authorized 
representative of the Department of Labor, shall incorporate the 
contract clause in the contract retroactive to commencement of 
performance under the contract through the exercise of any and all 
authority that may be needed (including, where necessary, its authority 
to negotiate or amend, its authority to pay any necessary additional 
costs, and its authority under any contract provision authorizing 
changes, cancellation, and termination).



                  Subpart E_Administrative Proceedings



Sec. 13.51  Disputes concerning contractor compliance.

    (a) This section sets forth the procedures for resolution of 
disputes of fact or law concerning a contractor's compliance with this 
part. The procedures in this section may be initiated upon the 
Administrator's own motion or upon request of the contractor.
    (b)(1) In the event of a dispute described in paragraph (a) of this 
section in which it appears that relevant facts are at issue, the 
Administrator will notify the affected contractor(s) and the prime 
contractor (if different) of the investigative findings by certified 
mail to the last known address.
    (2) A contractor desiring a hearing concerning the Administrator's 
investigative findings letter shall request such a hearing by letter 
postmarked within 30 calendar days of the date of the Administrator's 
letter. The request shall set forth those findings that are in dispute 
with respect to the violations and/or debarment, as appropriate, explain 
how the findings are in dispute including by making reference to any 
affirmative defenses.
    (3) Upon receipt of a timely request for a hearing, the 
Administrator shall refer the case to the Chief Administrative Law Judge 
by Order of Reference, to which shall be attached a copy of the 
investigative findings letter from the Administrator and response 
thereto, for designation to an Administrative Law Judge to conduct such 
hearings as may be necessary to resolve the disputed matters. The 
hearing shall be conducted in accordance with the procedures set forth 
in 29 CFR part 6.
    (c)(1) In the event of a dispute described in paragraph (a) of this 
section in which it appears that there are no

[[Page 224]]

relevant facts at issue, and where there is not at that time reasonable 
cause to institute debarment proceedings under Sec. 13.52, the 
Administrator shall notify the contractor(s) of the investigative 
findings by certified mail to the last known address, and shall issue a 
ruling in the investigative findings letter on any issues of law known 
to be in dispute.
    (2)(i) If the contractor disagrees with the factual findings of the 
Administrator or believes that there are relevant facts in dispute, the 
contractor shall so advise the Administrator by letter postmarked within 
30 calendar days of the date of the Administrator's letter. In the 
response, the contractor shall explain in detail the facts alleged to be 
in dispute and attach any supporting documentation.
    (ii) Upon receipt of a timely response under paragraph (c)(2)(i) of 
this section alleging the existence of a factual dispute, the 
Administrator shall examine the information submitted. If the 
Administrator determines that there is a relevant issue of fact, the 
Administrator shall refer the case to the Chief Administrative Law Judge 
in accordance with paragraph (b)(3) of this section. If the 
Administrator determines that there is no relevant issue of fact, the 
Administrator shall so rule and advise the contractor accordingly.
    (3) If the contractor desires review of the ruling issued by the 
Administrator under paragraph (c)(1) or the final sentence of (c)(2)(ii) 
of this section, the contractor shall file a petition for review thereof 
with the Administrative Review Board postmarked within 30 calendar days 
of the date of the ruling, with a copy thereof to the Administrator. The 
petition for review shall be filed in accordance with the procedures set 
forth in 29 CFR part 7.
    (d) If a timely response to the Administrator's investigative 
findings letter is not made or a timely petition for review is not 
filed, the Administrator's investigative findings letter shall become 
the final order of the Secretary. If a timely response or petition for 
review is filed, the Administrator's letter shall be inoperative unless 
and until the decision is upheld by an Administrative Law Judge or the 
Administrative Review Board or otherwise becomes a final order of the 
Secretary.



Sec. 13.52  Debarment proceedings.

    (a) Whenever any contractor is found by the Secretary of Labor to 
have disregarded its obligations to employees or subcontractors under 
Executive Order 13706 or this part, such contractor and its responsible 
officers, and any firm, corporation, partnership, or association in 
which such contractor or responsible officers have an interest, shall be 
ineligible for a period up to 3 years to receive any contracts or 
subcontracts subject to Executive Order 13706 from the date of 
publication of the name or names of the contractor or persons on the 
excluded parties list currently maintained on the System for Award 
Management Web site, http://www.SAM.gov.
    (b)(1) Whenever the Administrator finds reasonable cause to believe 
that a contractor has committed a violation of Executive Order 13706 or 
this part which constitutes a disregard of its obligations to employees 
or subcontractors, the Administrator shall notify by certified mail to 
the last known address or by personal delivery, the contractor and its 
responsible officers (and any firms, corporations, partnerships, or 
associations in which the contractor or responsible officers are known 
to have an interest), of the finding. The Administrator shall afford 
such contractor and any other parties notified an opportunity for a 
hearing as to whether debarment action should be taken under Executive 
Order 13706 or this part. The Administrator shall furnish to those 
notified a summary of the investigative findings. If the contractor or 
any other parties notified wish to request a hearing as to whether 
debarment action should be taken, such a request shall be made by letter 
to the Administrator postmarked within 30 calendar days of the date of 
the investigative findings letter from the Administrator, and shall set 
forth any findings which are in dispute and the reasons therefor, 
including any affirmative defenses to be raised. Upon receipt of such 
timely request for a hearing, the Administrator shall refer the case to 
the Chief Administrative Law Judge by Order of Reference, to which

[[Page 225]]

shall be attached a copy of the investigative findings letter from the 
Administrator and the response thereto, for designation of an 
Administrative Law Judge to conduct such hearings as may be necessary to 
determine the matters in dispute.
    (2) Hearings under this section shall be conducted in accordance 
with the procedures set forth in 29 CFR part 6. If no hearing is 
requested within 30 calendar days of the letter from the Administrator, 
the Administrator's findings shall become the final order of the 
Secretary.



Sec. 13.53  Referral to Chief Administrative Law Judge; amendment
of pleadings.

    (a) Upon receipt of a timely request for a hearing under Sec. 13.51 
(where the Administrator has determined that relevant facts are in 
dispute) or Sec. 13.52 (debarment), the Administrator shall refer the 
case to the Chief Administrative Law Judge by Order of Reference, to 
which shall be attached a copy of the investigative findings letter from 
the Administrator and response thereto, for designation of an 
Administrative Law Judge to conduct such hearings as may be necessary to 
decide the disputed matters. A copy of the Order of Reference and 
attachments thereto shall be served upon the respondent. The 
investigative findings letter from the Administrator and response 
thereto shall be given the effect of a complaint and answer, 
respectively, for purposes of the administrative proceedings.
    (b) At any time prior to the closing of the hearing record, the 
complaint (investigative findings letter) or answer (response) may be 
amended with the permission of the Administrative Law Judge and upon 
such terms as the Administrative Law Judge may approve. For proceedings 
pursuant to Sec. 13.51, such an amendment may include a statement that 
debarment action is warranted under Sec. 13.52. Such amendments shall be 
allowed when justice and the presentation of the merits are served 
thereby, provided there is no prejudice to the objecting party's 
presentation on the merits. When issues not raised by the pleadings are 
reasonably within the scope of the original complaint and are tried by 
express or implied consent of the parties, they shall be treated in all 
respects as if they had been raised in the pleadings, and such 
amendments may be made as necessary to make them conform to the 
evidence. The presiding Administrative Law Judge may, upon reasonable 
notice and upon such terms as are just, permit supplemental pleadings 
setting forth transactions, occurrences, or events that have happened 
since the date of the pleadings and that are relevant to any of the 
issues involved. A continuance in the hearing may be granted or the 
record left open to enable the new allegations to be addressed.



Sec. 13.54  Consent findings and order.

    (a) At any time prior to the receipt of evidence or, at the 
Administrative Law Judge's discretion prior to the issuance of the 
Administrative Law Judge's decision, the parties may enter into consent 
findings and an order disposing of the proceeding in whole or in part.
    (b) Any agreement containing consent findings and an order disposing 
of a proceeding in whole or in part shall also provide:
    (1) That the order shall have the same force and effect as an order 
made after full hearing;
    (2) That the entire record on which any order may be based shall 
consist solely of the Administrator's findings letter and the agreement;
    (3) A waiver of any further procedural steps before the 
Administrative Law Judge and the Administrative Review Board regarding 
those matters which are the subject of the agreement; and
    (4) A waiver of any right to challenge or contest the validity of 
the findings and order entered into in accordance with the agreement.
    (c) Within 30 calendar days after receipt of an agreement containing 
consent findings and an order disposing of the disputed matter in whole, 
the Administrative Law Judge shall, if satisfied with its form and 
substance, accept such agreement by issuing a decision based upon the 
agreed findings and order. If such agreement disposes of only a part of 
the disputed matter, a

[[Page 226]]

hearing shall be conducted on the matters remaining in dispute.



Sec. 13.55  Administrative Law Judge proceedings.

    (a) Jurisdiction. The Office of Administrative Law Judges has 
jurisdiction to hear and decide appeals concerning questions of law and 
fact from the Administrator's investigative findings letters issued 
under Secs. 13.51 and 13.52.
    (b) Proposed findings of fact, conclusions, and order. Within 20 
calendar days of filing of the transcript of the testimony or such 
additional time as the Administrative Law Judge may allow, each party 
may file with the Administrative Law Judge proposed findings of fact, 
conclusions of law, and a proposed order, together with a supporting 
brief expressing the reasons for such proposals. Each party shall serve 
such proposals and brief on all other parties.
    (c) Decision. (1) Within a reasonable period of time after the time 
allowed for filing of proposed findings of fact, conclusions of law, and 
order, or within 30 calendar days of receipt of an agreement containing 
consent findings and order disposing of the disputed matter in whole, 
the Administrative Law Judge shall issue a decision. The decision shall 
contain appropriate findings, conclusions, and an order, and be served 
upon all parties to the proceeding.
    (2) If the respondent is found to have violated Executive Order 
13706 or this part, and if the Administrator requested debarment, the 
Administrative Law Judge shall issue an order as to whether the 
respondent is to be subject to the excluded parties list, including 
findings that the contractor disregarded its obligations to employees or 
subcontractors under the Executive Order or this part.
    (d) Limit on scope of review. The Equal Access to Justice Act, as 
amended, does not apply to proceedings under this part. Accordingly, 
Administrative Law Judges shall have no authority to award attorney's 
fees and/or other litigation expenses pursuant to the provisions of the 
Equal Access to Justice Act for any proceeding under this part.
    (e) Orders. If the Administrative Law Judge concludes a violation 
occurred, the final order shall mandate action to remedy the violation, 
including any monetary or equitable relief described in Sec. 13.44. 
Where the Administrator has sought imposition of debarment, the 
Administrative Law Judge shall determine whether an order imposing 
debarment is appropriate.
    (f) Finality. The Administrative Law Judge's decision shall become 
the final order of the Secretary, unless a timely petition for review is 
filed with the Administrative Review Board.



Sec. 13.56  Petition for review.

    (a) Filing. Within 30 calendar days after the date of the decision 
of the Administrative Law Judge (or such additional time as is granted 
by the Administrative Review Board), any party aggrieved thereby who 
desires review thereof shall file a petition for review of the decision 
with supporting reasons. Such party shall transmit the petition in 
writing to the Administrative Review Board with a copy thereof to the 
Chief Administrative Law Judge. The petition shall refer to the specific 
findings of fact, conclusions of law, or order at issue. A petition 
concerning the decision on debarment shall also state the disregard of 
obligations to employees and/or subcontractors, or lack thereof, as 
appropriate. A party must serve the petition for review, and all briefs, 
on all parties and the Chief Administrative Law Judge. It must also 
timely serve copies of the petition and all briefs on the Administrator, 
Wage and Hour Division, and on the Associate Solicitor, Division of Fair 
Labor Standards, Office of the Solicitor, U.S. Department of Labor, 
Washington, DC 20210.
    (b) Effect of filing. If a party files a timely petition for review, 
the Administrative Law Judge's decision shall be inoperative unless and 
until the Administrative Review Board issues an order affirming the 
decision, or the decision otherwise becomes a final order of the 
Secretary. If a petition for review concerns only the imposition of 
debarment, however, the remainder of the decision shall be effective 
immediately. No judicial review shall be available unless a timely 
petition for review to the Administrative Review Board is first filed.

[[Page 227]]



Sec. 13.57  Administrative Review Board proceedings.

    (a) Authority--(1) General. The Administrative Review Board has 
jurisdiction to hear and decide in its discretion appeals concerning 
questions of law and fact from investigative findings letters of the 
Administrator issued under Sec. 13.51(c)(1) or the final sentence of 
Sec. 13.51(c)(2)(ii), Administrator's rulings issued under Sec. 13.58, 
and decisions of Administrative Law Judges issued under Sec. 13.55. In 
considering the matters within the scope of its jurisdiction, the 
Administrative Review Board shall act as the authorized representative 
of the Secretary and shall act fully and finally on behalf of the 
Secretary concerning such matters.
    (2) Limit on scope of review. (i) The Administrative Review Board 
shall not have jurisdiction to pass on the validity of any provision of 
this part. The Administrative Review Board is an appellate body and 
shall decide cases properly before it on the basis of substantial 
evidence contained in the entire record before it. The Administrative 
Review Board shall not receive new evidence into the record.
    (ii) The Equal Access to Justice Act, as amended, does not apply to 
proceedings under this part. Accordingly, the Administrative Review 
Board shall have no authority to award attorney's fees and/or other 
litigation expenses pursuant to the provisions of the Equal Access to 
Justice Act for any proceeding under this part.
    (b) Decisions. The Administrative Review Board's final decision 
shall be issued within a reasonable period of time following receipt of 
the petition for review and shall be served upon all parties by mail to 
the last known address and on the Chief Administrative Law Judge (in 
cases involving an appeal from an Administrative Law Judge's decision).
    (c) Orders. If the Administrative Review Board concludes a violation 
occurred, the final order shall mandate action to remedy the violation, 
including, but not limited to, any monetary or equitable relief 
described in Sec. 13.44. Where the Administrator has sought imposition 
of debarment, the Administrative Review Board shall determine whether an 
order imposing debarment is appropriate.
    (d) Finality. The decision of the Administrative Review Board shall 
become the final order of the Secretary.



Sec. 13.58  Administrator ruling.

    (a) Questions regarding the application and interpretation of the 
rules contained in this part may be referred to the Administrator, who 
shall issue an appropriate ruling. Requests for such rulings should be 
addressed to the Administrator, Wage and Hour Division, U.S. Department 
of Labor, Washington, DC 20210.
    (b) Any interested party may appeal to the Administrative Review 
Board for review of a final ruling of the Administrator issued under 
paragraph (a) of this section. The petition for review shall be filed 
with the Administrative Review Board within 30 calendar days of the date 
of the ruling.



               Sec. Appendix A to Part 13--Contract Clause

    The following clause shall be included by the contracting agency in 
every contract, contract-like instrument, and solicitation to which 
Executive Order 13706 applies, except for procurement contracts subject 
to the Federal Acquisition Regulation (FAR):
    (a) Executive Order 13706. This contract is subject to Executive 
Order 13706, the regulations issued by the Secretary of Labor in 29 CFR 
part 13 pursuant to the Executive Order, and the following provisions.
    (b) Paid Sick Leave. (1) The contractor shall permit each employee 
(as defined in 29 CFR 13.2) engaged in the performance of this contract 
by the prime contractor or any subcontractor, regardless of any 
contractual relationship that may be alleged to exist between the 
contractor and employee, to earn not less than 1 hour of paid sick leave 
for every 30 hours worked. The contractor shall additionally allow 
accrual and use of paid sick leave as required by Executive Order 13706 
and 29 CFR part 13. The contractor shall in particular comply with the 
accrual, use, and other requirements set forth in 29 CFR 13.5 and 13.6, 
which are incorporated by reference in this contract.
    (2) The contractor shall provide paid sick leave to all employees 
when due free and clear and without subsequent deduction (except as 
otherwise provided by 29 CFR 13.24), rebate, or kickback on any account. 
The contractor shall provide pay and benefits for paid sick leave used 
no later than one pay period following the end of the regular pay

[[Page 228]]

period in which the paid sick leave was taken.
    (3) The prime contractor and any upper-tier subcontractor shall be 
responsible for the compliance by any subcontractor or lower-tier 
subcontractor with the requirements of Executive Order 13706, 29 CFR 
part 13, and this clause.
    (c) Withholding. The contracting officer shall, upon its own action 
or upon written request of an authorized representative of the 
Department of Labor, withhold or cause to be withheld from the prime 
contractor under this or any other Federal contract with the same prime 
contractor, so much of the accrued payments or advances as may be 
considered necessary to pay employees the full amount owed to compensate 
for any violation of the requirements of Executive Order 13706, 29 CFR 
part 13, or this clause, including any pay and/or benefits denied or 
lost by reason of the violation; other actual monetary losses sustained 
as a direct result of the violation, and liquidated damages.
    (d) Contract Suspension/Contract Termination/Contractor Debarment. 
In the event of a failure to comply with Executive Order 13706, 29 CFR 
part 13, or this clause, the contracting agency may on its own action or 
after authorization or by direction of the Department of Labor and 
written notification to the contractor, take action to cause suspension 
of any further payment, advance, or guarantee of funds until such 
violations have ceased. Additionally, any failure to comply with the 
requirements of this clause may be grounds for termination of the right 
to proceed with the contract work. In such event, the Government may 
enter into other contracts or arrangements for completion of the work, 
charging the contractor in default with any additional cost. A breach of 
the contract clause may be grounds for debarment as a contractor and 
subcontractor as provided in 29 CFR 13.52.
    (e) The paid sick leave required by Executive Order 13706, 29 CFR 
part 13, and this clause is in addition to a contractor's obligations 
under the Service Contract Act and Davis-Bacon Act, and a contractor may 
not receive credit toward its prevailing wage or fringe benefit 
obligations under those Acts for any paid sick leave provided in 
satisfaction of the requirements of Executive Order 13706 and 29 CFR 
part 13.
    (f) Nothing in Executive Order 13706 or 29 CFR part 13 shall excuse 
noncompliance with or supersede any applicable Federal or State law, any 
applicable law or municipal ordinance, or a collective bargaining 
agreement requiring greater paid sick leave or leave rights than those 
established under Executive Order 13706 and 29 CFR part 13.
    (g) Recordkeeping. (1) Any contractor performing work subject to 
Executive Order 13706 and 29 CFR part 13 must make and maintain, for no 
less than three (3) years from the completion of the work on the 
contract, records containing the information specified in paragraphs (i) 
through (xv) of this section for each employee and shall make them 
available for inspection, copying, and transcription by authorized 
representatives of the Wage and Hour Division of the U.S. Department of 
Labor:
    (i) Name, address, and Social Security number of each employee;
    (ii) The employee's occupation(s) or classification(s);
    (iii) The rate or rates of wages paid (including all pay and 
benefits provided);
    (iv) The number of daily and weekly hours worked;
    (v) Any deductions made;
    (vi) The total wages paid (including all pay and benefits provided) 
each pay period;
    (vii) A copy of notifications to employees of the amount of paid 
sick leave the employee has accrued, as required under 29 CFR 
13.5(a)(2);
    (viii) A copy of employees' requests to use paid sick leave, if in 
writing, or, if not in writing, any other records reflecting such 
employee requests;
    (ix) Dates and amounts of paid sick leave taken by employees (unless 
a contractor's paid time off policy satisfies the requirements of 
Executive Order 13706 and 29 CFR part 13 as described in 
Sec. 13.5(f)(5), leave must be designated in records as paid sick leave 
pursuant to Executive Order 13706);
    (x) A copy of any written responses to employees' requests to use 
paid sick leave, including explanations for any denials of such 
requests, as required under 29 CFR 13.5(d)(3);
    (xi) Any records reflecting the certification and documentation a 
contractor may require an employee to provide under 29 CFR 13.5(e), 
including copies of any certification or documentation provided by an 
employee;
    (xii) Any other records showing any tracking of or calculations 
related to an employee's accrual or use of paid sick leave;
    (xiii) The relevant covered contract;
    (xiv) The regular pay and benefits provided to an employee for each 
use of paid sick leave; and
    (xv) Any financial payment made for unused paid sick leave upon a 
separation from employment intended, pursuant to 29 CFR 13.5(b)(5), to 
relieve a contractor from the obligation to reinstate such paid sick 
leave as otherwise required by 29 CFR 13.5(b)(4).
    (2)(i) If a contractor wishes to distinguish between an employee's 
covered and non-covered work, the contractor must keep records or other 
proof reflecting such distinctions. Only if the contractor adequately 
segregates the employee's time will time spent on non-covered work be 
excluded from hours worked counted toward the accrual of paid sick 
leave. Similarly, only if that contractor adequately segregates the 
employee's time may a contractor properly refuse an employee's

[[Page 229]]

request to use paid sick leave on the ground that the employee was 
scheduled to perform non-covered work during the time she asked to use 
paid sick leave.
    (ii) If a contractor estimates covered hours worked by an employee 
who performs work in connection with covered contracts pursuant to 29 
CFR 13.5(a)(i) or (iii), the contractor must keep records or other proof 
of the verifiable information on which such estimates are reasonably 
based. Only if the contractor relies on an estimate that is reasonable 
and based on verifiable information will an employee's time spent in 
connection with non-covered work be excluded from hours worked counted 
toward the accrual of paid sick leave. If a contractor estimates the 
amount of time an employee spends performing in connection with covered 
contracts, the contractor must permit the employee to use her paid sick 
leave during any work time for the contractor.
    (3) In the event a contractor is not obligated by the Service 
Contract Act, the Davis-Bacon Act, or the Fair Labor Standards Act to 
keep records of an employee's hours worked, such as because the employee 
is exempt from the FLSA's minimum wage and overtime requirements, and 
the contractor chooses to use the assumption permitted by 29 CFR 
13.5(a)(1)(iii), the contractor is excused from the requirement in 
paragraph (1)(d) of this section to keep records of the employee's 
number of daily and weekly hours worked.
    (4)(i) Records relating to medical histories or domestic violence, 
sexual assault, or stalking, created for purposes of Executive Order 
13706, whether of an employee or an employee's child, parent, spouse, 
domestic partner, or other individual related by blood or affinity whose 
close association with the employee is the equivalent of a family 
relationship, shall be maintained as confidential records in separate 
files/records from the usual personnel files.
    (ii) If the confidentiality requirements of the Genetic Information 
Nondiscrimination Act of 2008 (GINA), section 503 of the Rehabilitation 
Act of 1973, and/or the Americans with Disabilities Act (ADA) apply to 
records or documents created to comply with the recordkeeping 
requirements in this contract clause, the records and documents must 
also be maintained in compliance with the confidentiality requirements 
of the GINA, section 503 of the Rehabilitation Act of 1973, and/or ADA 
as described in 29 CFR 1635.9, 41 CFR 60-741.23(d), and 29 CFR 
1630.14(c)(1), respectively.
    (iii) The contractor shall not disclose any documentation used to 
verify the need to use 3 or more consecutive days of paid sick leave for 
the purposes listed in 29 CFR 13.5(c)(1)(iv) (as described in 29 CFR 
13.5(e)(1)(ii)) and shall maintain confidentiality about any domestic 
abuse, sexual assault, or stalking, unless the employee consents or when 
disclosure is required by law.
    (5) The contractor shall permit authorized representatives of the 
Wage and Hour Division to conduct interviews with employees at the 
worksite during normal working hours.
    (6) Nothing in this contract clause limits or otherwise modifies the 
contractor's recordkeeping obligations, if any, under the Davis-Bacon 
Act, the Service Contract Act, the Fair Labor Standards Act, the Family 
and Medical Leave Act, Executive Order 13658, their respective 
implementing regulations, or any other applicable law.
    (h) The contractor (as defined in 29 CFR 13.2) shall insert this 
clause in all of its covered subcontracts and shall require its 
subcontractors to include this clause in any covered lower-tier 
subcontracts.
    (i) Certification of Eligibility. (1) By entering into this 
contract, the contractor (and officials thereof) certifies that neither 
it (nor he or she) nor any person or firm who has an interest in the 
contractor's firm is a person or firm ineligible to be awarded 
Government contracts by virtue of the sanctions imposed pursuant to 
section 5 of the Service Contract Act, section 3(a) of the Davis-Bacon 
Act, or 29 CFR 5.12(a)(1).
    (2) No part of this contract shall be subcontracted to any person or 
firm whose name appears on the list of persons or firms ineligible to 
receive Federal contracts currently maintained on the System for Award 
Management Web site, http://www.SAM.gov.
    (3) The penalty for making false statements is prescribed in the 
U.S. Criminal Code, 18 U.S.C. 1001.
    (j) Interference/Discrimination. (1) A contractor may not in any 
manner interfere with an employee's accrual or use of paid sick leave as 
required by Executive Order 13706 or 29 CFR part 13. Interference 
includes, but is not limited to, miscalculating the amount of paid sick 
leave an employee has accrued, denying or unreasonably delaying a 
response to a proper request to use paid sick leave, discouraging an 
employee from using paid sick leave, reducing an employee's accrued paid 
sick leave by more than the amount of such leave used, transferring an 
employee to work on non-covered contracts to prevent the accrual or use 
of paid sick leave, disclosing confidential information contained in 
certification or other documentation provided to verify the need to use 
paid sick leave, or making the use of paid sick leave contingent on the 
employee's finding a replacement worker or the fulfillment of the 
contractor's operational needs.
    (2) A contractor may not discharge or in any other manner 
discriminate against any employee for:
    (i) Using, or attempting to use, paid sick leave as provided for 
under Executive Order 13706 and 29 CFR part 13;

[[Page 230]]

    (ii) Filing any complaint, initiating any proceeding, or otherwise 
asserting any right or claim under Executive Order 13706 and 29 CFR part 
13;
    (iii) Cooperating in any investigation or testifying in any 
proceeding under Executive Order 13706 and 29 CFR part 13; or
    (iv) Informing any other person about his or her rights under 
Executive Order 13706 and 29 CFR part 13.
    (k) Waiver. Employees cannot waive, nor may contractors induce 
employees to waive, their rights under Executive Order 13706, 29 CFR 
part 13, or this clause.
    (l) Notice. The contractor must notify all employees performing work 
on or in connection with a covered contract of the paid sick leave 
requirements of Executive Order 13706, 29 CFR part 13, and this clause 
by posting a notice provided by the Department of Labor in a prominent 
and accessible place at the worksite so it may be readily seen by 
employees. Contractors that customarily post notices to employees 
electronically may post the notice electronically, provided such 
electronic posting is displayed prominently on any Web site that is 
maintained by the contractor, whether external or internal, and 
customarily used for notices to employees about terms and conditions of 
employment.
    (m) Disputes concerning labor standards. Disputes related to the 
application of Executive Order 13706 to this contract shall not be 
subject to the general disputes clause of the contract. Such disputes 
shall be resolved in accordance with the procedures of the Department of 
Labor set forth in 29 CFR part 13. Disputes within the meaning of this 
contract clause include disputes between the contractor (or any of its 
subcontractors) and the contracting agency, the U.S. Department of 
Labor, or the employees or their representatives.



PART 14_SECURITY REGULATIONS--Table of Contents



             Subpart A_Introduction to Security Regulations

Sec.
14.1  Purpose.
14.2  Policy.
14.3  DOL Classification Review Committee.
14.4  Definitions.

               Subpart B_Review of Classified Information

14.10  Mandatory review for declassification.

            Subpart C_Transmission of Classified Information

14.20  Dissemination to individuals and firms outside the executive 
          branch.
14.21  Release of classified information to foreign governments.
14.22  Availability of classified information to persons not employed by 
          the Department of Labor.

    Authority: E.O. 12356 of April 2, 1982 (47 FR 14874).

    Source: 50 FR 51391, Dec. 17, 1985, unless otherwise noted.



             Subpart A_Introduction to Security Regulations



Sec. 14.1  Purpose.

    These regulations implement Executive Order 12356, entitled National 
Security Information, dated April 2, 1982, and directives issued 
pursuant to that Order through the National Security Council and the 
Atomic Energy Act of 1954, as amended.



Sec. 14.2  Policy.

    The interests of the United States and its citizens are best served 
when information regarding the affairs of Government is readily 
available to the public. Provisions for such an informed citizenry are 
reflected in the Freedom of Information Act (5 U.S.C. 552) and in the 
current public information policies of the executive branch.
    (a) Safeguarding national security information. Some official 
information within the Federal Government is directly concerned with 
matters of national defense and the conduct of foreign relations. This 
information must, therefore, be subject to security constraints, and 
limited in term of its distribution.
    (b) Exemption from public disclosure. Official information of a 
sensitive nature, hereinafter referred to as national security 
information, is expressly exempted from compulsory public disclosure by 
Section 552(b)(1) of title 5 U.S.C. Persons wrongfully disclosing such 
information are subject to prosecution under United States criminal 
laws.
    (c) Scope. To ensure that national security information is 
protected, but only to the extent and for such a period as is necessary, 
these regulations:
    (1) Identify information to be protected.

[[Page 231]]

    (2) Prescribe procedures on classification, declassification, 
downgrading, and safeguarding of information.
    (3) Establish a monitoring system to ensure the effectiveness of the 
Department of Labor (DOL) security program and regulations.
    (d) Limitation. The need to safeguard national security information 
in no way implies an indiscriminate license to withhold information from 
the public. It is important that the citizens of the United States have 
access, consistent with national security, to information concerning the 
policies and programs of their Government.



Sec. 14.3  DOL Classification Review Committee.

    A DOL Classification Review Committee is hereby established.
    (a) Composition of committee. The members of this Committee are:

Chairperson--Deputy Assistant Secretary for Security and Emergency 
Management, OASAM.
Member--Administrative Officer, Office of the Solicitor.
Member--Director, Office of Foreign Relations, Bureau of International 
Labor Affairs.
Advisor--DOL Document Security Officer.

    (b) Responsibilities. The Committee is responsible for:
    (1) Acting on all suggestions and complaints arising with respect to 
the DOL's information security program.
    (2) Reviewing all requests for records under the Freedom of 
Information Act, 5 U.S.C. 552, when a proposed denial is based on 
classification under Executive Order 12356 to determine if such 
classification is current.
    (3) Recommending to the Secretary of Labor appropriate 
administrative actions to correct abuses or violations of any provision 
of Executive Order 12356 or directives thereunder. Recommended 
administrative actions may include notification by warning letter, 
formal reprimand, and, to the extent permitted by law, suspension 
without pay and removal. Upon receipt of any such recommendation, the 
Secretary shall immediately advise the Committee of the action taken.

[50 FR 51391, Dec. 17, 1985, as amended at 72 FR 37098, July 9, 2007]



Sec. 14.4  Definitions.

    The following definitions apply under these regulations:
    (a) Primary organization unit--refers to an agency headed by an 
official reporting to the Secretary or Deputy Secretary.
    (b) Classify--to assign information to one of the classification 
categories after determining that the information requires protection in 
the interest of national security.
    (c) Courier--an individual designated by appropriate authority to 
protect classified and administratively controlled information in 
transit.
    (d) Custodian--the person who has custody or is responsible for the 
custody of classified information.
    (e) Declassify--the authorized removal of an assigned 
classification.
    (f) Document--any recorded information regardless of its physical 
form or characteristics, including (but not limited to):
    (1) Written material--(whether handwritten, printed or typed).
    (2) Painted, drawn, or engraved material.
    (3) Sound or voice recordings.
    (4) Printed photographs and exposed or printed films (either still 
or motion picture).
    (5) Reproductions of the foregoing, by whatever process.
    (g) Downgrade--to assign lower classfication than that previously 
assigned.
    (h) Derivative classification--a determination that information is 
in substance the same as information that is currently classified. It is 
to incorporate, paraphrase, restate or generate in new form information 
that is already classified (usually by another Federal agency).
    (i) Information Security Oversight Office (ISOO)--an office located 
in the National Archives and Records Administration (GSA) that monitors 
the implementation of E.O. 12356.
    (j) Marking--the physical act of indicating the assigned security 
classification on national security information.
    (k) Material--any document, product, or substance on or in which 
information is recorded or embodied.

[[Page 232]]

    (l) Nonrecord material--extra copies and duplicates, the use of 
which is temporary, including shorthand notes, used carbon paper, 
preliminary drafts, and other material of similar nature.
    (m) Paraphrasing--a restatement of the text without alteration of 
its meaning.
    (n) Product and substance--any item of material (other than a 
document) in all stages of development, processing, or construction and 
including elements, ingredients, components, accessories, fixtures, 
dies, models, and mockup associated with such items.
    (o) Record material--all books, papers, maps, photographs, or other 
documentary materials, regardless of physical form or characteristics, 
made or received by the U.S. Government in connection with the 
transaction of public business; this includes material preserved by an 
agency or its legitimate successor as evidence of its organization, 
functions, policies, decisions, procedures, or other activities, or 
because of the informational data contained herein.
    (p) True reading--the paraphrased literal text.
    (q) Upgraded--to assign a higher classification than that previously 
assigned.

[50 FR 51391, Dec. 17, 1985, as amended at 72 FR 37098, July 9, 2007]



               Subpart B_Review of Classified Information



Sec. 14.10  Mandatory review for declassification.

    (a) Scope of review. The mandatory review procedures apply to 
information originally classified by the DOL when it had such authority, 
i.e., before December 1, 1978. Requests may come from members of the 
public or a government employee or agency. The procedures do not apply 
to information originated by other agencies and merely held in 
possession of the DOL. Requests for disclosure submitted under 
provisions of the Freedom of Information Act are to be processed in 
accordance with provisions of that Act.
    (b) Where requests should be directed. Requests for mandatory review 
for declassification should be directed to the Department of Labor, 
Office of the Assistant Secretary for Administration and Management 
(OASAM), Washington, DC 20210. Requests should be in writing and should 
reasonably describe the classified information to allow identification. 
Whenever a request does not reasonably describe the information sought, 
the requestor will be notified that unless additional information is 
provided or the scope of the request is narrowed, no further action will 
be undertaken.
    (c) Processing. The OASAM will assign the request for information to 
the appropriate DOL office for declassification consideration. A 
decision will be made within 60 days as to whether the requested 
information may be declassified and, if so, made available to the 
requestor. If the information may not be released in whole or in part, 
the requestor will be given a brief statement as to the reasons for 
denial, and a notice of the right to appeal the determination to the DOL 
Classification Review Committee, Office of the Assistant Secretary for 
Administration and Management, Washington, DC 20210. The requestor is to 
be told that such an appeal must be filed with the DOL within 60 days.
    (d) Appeals procedure. The DOL Classification Review Committee will 
review and act within 30 days on all applications and appeals for the 
declassification of information. The Committee is authorized to overrule 
on behalf of the Secretary, Agency determinations in whole or in part, 
when it decides that continued protection is not required. It will 
notify the requestor of the declassification and provide the 
information. If the Committee determines that continued classification 
is required, it will promply notify the requestor and provide the 
reasons for the determination.
    (e) Burden of proof. In evaluating requests for declassification the 
DOL Classification Review Committee will require the DOL office having 
jurisdiction over the document to prove that continued classification is 
warranted.
    (f) Fees. If the request requires a service for which fair and 
equitable fees may be charged pursuant to title 5 of the Independent 
Office Appropriation Act, 31 U.S.C. 483a (1976), the requestor will be 
notified and charged.

[[Page 233]]



            Subpart C_Transmission of Classified Information



Sec. 14.20  Dissemination to individuals and firms outside the 
executive branch.

    Request for classified information received from sources outside the 
executive branch of the Federal Government, provided the information has 
been originated by the DOL, will be honored in accordance with the 
following guidelines:
    (a) Top Secret information. All requests for Top Secret information 
by an individual or firm outside the executive branch must be referred 
promptly to the OASAM for consideration on an individual basis.
    (b) Secret and Confidential information. Subject to the restrictions 
below, Secret or Confidential information may be furnished to an 
individual or firm outside the executive branch if the action furthers 
the official program of the organization unit in which the information 
originated. The official furnishing such information must ensure that 
the individuals to whom the information is to be furnished have the 
appropriate DOL clearance, or at least clearance for the same or higher 
classification for another Federal department, or outside agency whose 
security clearances are acceptable to the DOL. The official must also 
ensure that the person to whom the classified information is being 
furnished possess the proper facilities for safeguarding such 
information. No Secret or Confidential information may be furnished to 
an individual or firm outside the executive branch without written 
concurrence from the primary organizational unit head or the Security 
Officer of that unit.
    (c) Unauthorized knowledge of classified information. Upon receipt 
of a request for classified information which raised a suspicion that an 
individual or organization outside the executive branch has unauthorized 
knowledge of the existence of Confidential, Secret, or Top Secret 
information, a report providing all available details must be 
immediately submitted to the DOL Document Security Officer for 
appropriate action and disposition.
    (d) Requests from outside the United States. All requests from 
outside the United States for Top Secret, Secret or Confidential 
information, except those received from foreign offices of the primary 
organizational unit or from U.S. embassies or similar missions, will be 
referred to the Deputy Under Secretary for International Labor Affairs.
    (e) Access by historical researchers. Individuals outside the 
executive branch engaged in historical research may be authorized access 
to classified information over which the DOL has jurisdiction provided:
    (1) The research and need for access conform to the requirements of 
section 4-3 of Executive Order 12356.
    (2) The information requested is reasonably accessible and can be 
located and compiled with a reasonable amount of effort.
    (3) The researcher agrees to safeguard the information in a manner 
consistent with E.O. 12356 and directives thereunder.
    (4) The researcher agrees to a review of the notes and manuscript to 
determine that no classified information is contained therein.

Authorization for access is valid for the period required but no longer 
than two years from the date of issuance unless it is renewed under the 
conditions and regulations governing its original authorization.
    (f) Access by former presidential appointees. Individuals who have 
previously occupied policymaking positions to which they were appointed 
by the President may be authorized access to classified information 
which they originated, reviewed, signed, or received while in public 
office. Upon request, information identified by such individuals will be 
reviewed for declassification in accordance with the provisions of these 
regulations.

[50 FR 51391, Dec. 17, 1985, as amended at 72 FR 37098, July 9, 2007]



Sec. 14.21  Release of classified information to foreign governments.

    National security information will be released to foreign 
governments in accordance with the criteria and procedures stated in the 
President's Directive entitled ``Basic Policy Governing

[[Page 234]]

the Release of Classified Defense Information to Foreign Governments'' 
dated September 25, 1958. All requests for the release of such 
information will be referred to the Deputy Under Secretary for 
International Labor Affairs.

[50 FR 51391, Dec. 17, 1985, as amended at 72 FR 37098, July 9, 2007]



Sec. 14.22  Availability of classified information to persons not
employed by the Department of Labor.

    (a) Approval for access. Access to classified information in the 
possession or custody of the primary organizational units of the 
Department by individuals who are not employees of the executive branch 
shall be approved in advance by the DOL Document Security Officer.
    (b) Access to Top Secret material. Access to Top Secret Information 
within the primary organizational units of the DOL by employees of other 
Federal agencies must be approved in advance by the Top Secret Control 
Officer of the primary organizational unit.
    (c) Access to Secret and Confidential information. Secret and 
Confidential information may be made available to properly cleared 
employees of other Federal departments or outside agencies if authorized 
by the primary organizational units having custody of the information.



PART 15_ADMINISTRATIVE CLAIMS UNDER THE FEDERAL TORT CLAIMS ACT AND
RELATED CLAIMS STATUTES--Table of Contents



                         Subpart A_Introduction

Sec.
15.1  What is the scope and purpose of this part?
15.2  What definitions apply to this part?

 Subpart B_Claims Against the Government Under the Federal Tort Claims 
                                   Act

15.100  What claims against the Department are covered by the FTCA?
15.101  Who may file an administrative claim under the FTCA against the 
          Department?
15.102  May an insurance company file an FTCA administrative claim on 
          behalf of a claimant?
15.103  May an agent or legal representative file an FTCA administrative 
          claim on behalf of a claimant?
15.104  Where should the FTCA administrative claim be filed?
15.105  What information and evidence should be provided to DOL to 
          substantiate an FTCA administrative claim?
15.106  How is the administrative claim processed?
15.107  What must be provided in the administrative report?
15.108  Who is authorized to decide an administrative claim?
15.109  What if the claim is denied?
15.110  What must a claimant do if the administrative claim is approved?
15.111  If the administrative claim is approved, how is the award paid?

 Subpart C_Claims Under the Military Personnel and Civilian Employees' 
                           Claims Act of 1964

15.200  What is a claim under the MPCECA and who may file such a claim?
15.201  Where should the MPCECA claim be filed?
15.202  How is a claim filed under the MPCECA?
15.203  When should a claim under the MPCECA be filed?
15.204  Are there limits on claims under the MPCECA?
15.205  What types of claims for property damage are allowed under the 
          MPCECA?
15.206  What claims arising at a residence or Telework location may be 
          covered under the MPCECA?
15.207  What are examples of claims allowed under the MPCECA?
15.208  What are the restrictions on otherwise allowable claims?
15.209  What claims are not allowed?
15.210  What affect does insurance have on a claim under the MPCECA?
15.211  How is a claim under this subpart processed?
15.212  How is the amount of the award under this subpart calculated?
15.213  Are there limits to representatives' fees for claims under this 
          subpart?
15.214  How may a decision under this subpart be reconsidered?

     Subpart D_Claims Arising Out of the Operation of the Job Corps

15.300  How are claims involving the Job Corps initiated?
15.301  What office is responsible for determining liability in claims 
          arising out of the Job Corps?
15.302  What procedures apply to these claims?
15.303  How does a Job Corps student file a claim for loss of or damages 
          to personal property under the WIA?

[[Page 235]]

15.304  Are there limits to claims for loss of or damages to personal 
          property under the WIA?

    Authority: 28 U.S.C. 2672; 28 CFR Sec. 14.11; 31 U.S.C. 3721; 29 
U.S.C. 2897(b).

    Source: 77 FR 22207, Apr. 13, 2012, unless otherwise noted.



                         Subpart A_Introduction



Sec. 15.1  What is the scope and purpose of this part?

    (a) The regulations in this part provide procedures to be followed 
for claims asserted against the Department of Labor under the Federal 
Tort Claims Act, 28 U.S.C. 2671, et seq., under the Military Personnel 
and Civilian Employees' Claims Act of 1964, 31 U.S.C. 3721, and for 
claims arising out of the operation of Job Corps Centers under the 
Workforce Investment Act of 1998, 29 U.S.C. 2897(b).
    (b) Subpart B of this part provides the procedures followed in 
processing claims asserted under the Federal Tort Claims Act, as 
amended, for money damages against the United States for injury to or 
loss of property or personal injury or death caused by the negligent or 
wrongful act or omission of an officer or employee of the Department of 
Labor while acting within the scope of his or her office or employment. 
This subpart is issued subject to and consistent with applicable 
regulations on administrative claims under the Federal Tort Claims Act 
issued by the Attorney General (28 CFR part 14).
    (c) Subpart C of this part provides the procedures for processing 
claims filed by or on behalf of employees of the Department of Labor for 
loss of or damage to personal property incident to their service with 
the Department under the Military Personnel and Civilian Employees' 
Claims Act of 1964.
    (d) Subpart D of this part provides the procedures used in 
processing claims relating to damage to persons or property arising out 
of the operation of Job Corps, pursuant to the Workforce Investment Act, 
including damages under the Federal Tort Claims Act, damage to personal 
property of Job Corps students, and claims which the Secretary of Labor 
finds to be a proper charge against the United States but which are not 
cognizable under the Federal Tort Claims Act.



Sec. 15.2  What definitions apply to this part?

    (a) Department means the Department of Labor.
    (b) Organizational unit means the jurisdictional area of each 
Assistant Secretary and each office head within the Department reporting 
directly to the Secretary.
    (c) Counsel for Claims and Compensation means the Department's 
deciding official in the Office of the Solicitor for certain 
administrative claims under this part. The address for the Counsel for 
Claims and Compensation is U.S. Department of Labor, 200 Constitution 
Avenue NW., Suite S4325, Washington, DC 20210. Telephone and fax numbers 
for this official may be found on the Department's Web site at 
www.dol.gov.
    (d) Regional Solicitor means the head of the appropriate Regional 
Office (Regional Solicitor) or Branch Office (Associate Regional 
Solicitor) of the Office of Solicitor with jurisdiction to handle 
certain claims under this part.
    (e) FTCA means the Federal Tort Claims Act, as amended, 28 U.S.C. 
1346(b), 28 U.S.C. 2671, et seq.
    (f) MPCECA means the Military Personnel and Civilian Employees' 
Claims Act of 1964, 31 U.S.C. 3721.
    (g) WIA means the Workforce Investment Act of 1998, 29 U.S.C. 
2897(b).



 Subpart B_Claims Against the Government Under the Federal Tort Claims 
                                   Act



Sec. 15.100  What claims against the Department are covered by the FTCA?

    (a) The FTCA is a limited waiver of sovereign immunity that allows 
claims for money damages against the Department for negligent acts or 
omissions of its employees acting within the course and scope of their 
employment. Subject to the exception set forth in paragraph (b) of this 
section, all such claims against the Department should be handled under 
the procedures in this subpart.
    (b) In instances where a third party has agreed to insure the 
Federal government, such as under a U.S. Government Car Rental 
Agreement, claimants

[[Page 236]]

are required to pursue those claims in accordance with such agreements.



Sec. 15.101  Who may file an administrative claim under the FTCA against
the Department?

    (a) A claim for the injury to or loss of property may be presented 
by the owner of the property, his or her duly authorized agent, or his 
or her legal representative.
    (b) A claim for personal injury may be presented by the injured 
person, his or her duly authorized agent, or his or her legal 
representative.
    (c) A claim for death may be presented by the executor or 
administrator of the decedent's estate or by any other person legally 
entitled to assert such a claim in accordance with applicable State law.
    (d) A claim presented by an agent or legal representative shall be 
presented in the name of the claimant, be signed by the agent or 
representative, show the title or legal capacity of the person signing 
and be accompanied by evidence of his or her authority to present a 
claim on behalf of the claimant as agent, executor, administrator, 
parent, guardian, or legal representative.
    (e) Only claims involving alleged acts or omissions of Department 
employees (including Job Corps students) should be presented to the 
Department.



Sec. 15.102  May an insurance company file an FTCA administrative claim
on behalf of a claimant?

    (a) A claim for loss wholly compensated by an insurance company may 
be presented by that company.
    (b) A claim for loss partially compensated by an insurance company 
may be presented by the company or the insured individually, in 
accordance with their respective interests or jointly. It should be 
noted, however, that if the insurance company claims only part of the 
insured's interests, an acceptance of that claim may bar any additional 
claim by the insured for damages beyond that claimed by the insurance 
company as such acceptance would be in full and final settlement of all 
such claims arising out the incident that gave rise to the claim as 
described in Sec. 15.110(b).
    (c) If the claimant is directly compensated by the Department for 
medical bills under this subpart, the claimant may be required to 
reimburse his or her insurance company in accordance with the terms of 
his or her insurance policy if the company has already paid those bills.
    (d) Whenever an insurance company presents a claim on behalf of the 
insured (such as a claim for an auto loss that includes the deductible), 
it shall present with its claim appropriate evidence that it has the 
rights of a subrogee, such as a copy of the signed policy.



Sec. 15.103  May an agent or legal representative file an FTCA 
administrative claim on behalf of a claimant?

    (a) An agent or legal representative may file a claim on behalf of a 
claimant.
    (b) Representative's fees are limited to not more than 20 percent of 
the amount paid for a claim settled in an administrative claim, and to 
not more than 25 percent of a judgment or settlement award after 
litigation is initiated. 28 U.S.C. 2678.
    (c) If a representative is dismissed from representing a claimant 
before the claim is resolved, the representative may not place a lien on 
the claimant's recoveries under the claim.
    (d) Any purported representative of a minor must provide 
documentation that he or she is the legal agent of that minor.



Sec. 15.104  Where should the FTCA administrative claim be filed?

    (a) Only claims involving alleged acts or omissions of Department 
employees should be presented to the Department. For the purposes of 
this subpart, an FTCA claim shall be deemed to have been presented when 
the Department receives, at a place designated in paragraph (b) of this 
section, a properly executed ``Claim for Damage, Injury, or Death'' on 
Standard Form 95, or other written notification of an incident 
accompanied by a claim for money damages in a sum certain for injury to 
or loss of property or personal injury or death by reason of the 
incident.

[[Page 237]]

    (b) In any FTCA case where the claim seeks damages for an incident 
resulting in aggregate claims in excess of $25,000 or which involves an 
alleged act or omission of an employee of the Department whose official 
duty station is in Washington, DC, the claimant shall mail or deliver 
the claim for money damages for injury to or loss of property or 
personal injury or death caused by the negligent or wrongful act or 
omission of any employee of the Department while acting within the scope 
of office or employment to the Counsel for Claims and Compensation, 
Office of the Solicitor, U.S. Department of Labor, 200 Constitution 
Avenue NW., Suite S4325, Washington, DC 20210.
    (c) In all other cases, the claimant shall submit his or her claim 
to the official duty station of the employee whose act or omission forms 
the basis of the complaint, which should be immediately forwarded to the 
appropriate Regional Office of the Office of the Solicitor with all 
currently available documentation (such as a Standard Form 91, Motor 
Vehicle Accident Report).



Sec. 15.105  What information and evidence should be provided to DOL to
substantiate an FTCA administrative claim?

    (a) Personal injury. In support of a claim for personal injury, 
including pain and suffering, the claimant is required to submit the 
following evidence or information:
    (1) A written report by the attending physician or dentist setting 
forth the nature and extent of the injury, nature and extent of 
treatment, any degree of temporary or permanent impairment, the 
prognosis, period of hospitalization, if any, and any diminished earning 
capacity. In addition, the claimant may be required to submit to a 
physical or mental examination by a physician employed or designated by 
the Department or another Federal agency. A copy of the report of the 
examining physician shall be made available to the claimant upon the 
claimant's written request.
    (2) Itemized bills for medical, dental and hospital, or any other, 
expenses incurred or itemized receipts of payment for such expenses.
    (3) If the prognosis reveals the necessity for future treatment, a 
statement of expected expenses for such treatment.
    (4) Any other evidence or information which may have a bearing on 
either the responsibility of the United States for the personal injury 
or the damages claimed.
    (b) Death. In support of a claim based on death, the claimant may be 
required to submit the following evidence or information:
    (1) An authenticated death certificate, an autopsy report and or 
other competent evidence that includes cause or causes of death, date of 
death, and age of the decedent.
    (2) Decedent's employment or occupation at the time of death, 
including his or her monthly or yearly salary or earnings (if any), and 
the duration of his or her last employment or occupation.
    (3) Full name, address, birth date, kinship and marital status of 
the decedent's survivors, including identification of those survivors 
who were dependent for support upon the decedent at the time of his or 
her death.
    (4) Degree of support afforded by the decedent to each survivor 
dependent upon him or her for support at the time of his or her death.
    (5) Decedent's general physical and mental condition before his or 
her death.
    (6) Itemized bills for medical and burial expenses incurred by 
reason of the incident causing death, or itemized receipts of payment 
for such expenses.
    (7) If damages for pain and suffering prior to death are claimed, a 
physician's detailed statement specifying the injuries suffered, 
duration of pain and suffering, any drugs administered for pain, and the 
decedent's physical condition in the interval between injury and death.
    (8) Any other evidence or information which may have a bearing on 
either the responsibility of the United States for the death or damages 
claimed.
    (c) Property damages. In support of a claim for injury to or loss of 
property, real or personal, the claimant may be required to submit the 
following evidence or information with respect to each item of property:

[[Page 238]]

    (1) Proof of ownership.
    (2) A detailed statement of the amount claimed.
    (3) An itemized receipt of payment for necessary repairs or itemized 
written estimates of the cost of such repairs.
    (4) A statement listing date of purchase, purchase price, and 
salvage value where repair is not economical.
    (5) Any other evidence or information which may have a bearing on 
either the responsibility of the United States for the injury to or loss 
of property or the damages claimed.
    (d) Loss of income. In support of a claim based on loss of income, 
the claimant may be required to submit the following evidence or 
information:
    (1) A written statement from his or her employer showing actual time 
lost from employment, whether he or she is a full or part-time employee, 
and wages or salary actually lost.
    (2) If the claimant is self-employed, documentary evidence showing 
the amount of earnings lost such as:
    (i) Income tax returns for several years prior to the injury in 
question and the year in which the injury occurred may be used to 
indicate or measure lost income; or
    (ii) A statement of the actual or projected cost for the claimant to 
hire someone else to do the same work he or she was doing at the time of 
injury.
    (3) Any other evidence or information which may have a bearing on 
either the responsibility of the United States for the personal injury 
or the damages claimed.



Sec. 15.106  How is the administrative claim processed?

    (a) Investigation. When an organizational unit learns of an incident 
that reasonably can be expected to result in an allegation of harm 
caused to an individual or organization by an alleged negligent act or 
omission by an employee of that organizational unit or when it learns of 
an administrative claim or of litigation alleging such harm, it has the 
responsibility to fully investigate the incident and to take all actions 
necessary to preserve all relevant documents and other evidence. Each 
organizational unit should institute appropriate procedures to ensure 
that notification of such incidents are reported to the office 
responsible for ensuring that evidence is preserved and investigation 
undertaken.
    (b) Notification. Upon receipt of an administrative claim under the 
Act or of notice of litigation seeking damages for an alleged negligent 
act or omission of an employee of the Department acting within the scope 
of his or her employment, the Office of the Solicitor shall notify the 
organizational unit responsible for the activity which gave rise to the 
claim or litigation and shall provide a copy of the administrative claim 
or the claim filed in the litigation.
    (c) FTCA Contact. Each organizational unit will establish an FTCA 
contact, unless this requirement is waived by the Counsel for Claims and 
Compensation. The FTCA contact will coordinate and oversee the 
preservation of documents related to the circumstances of all claims 
arising from his or her organizational unit. The FTCA contact will 
arrange for the preparation and submission of the Administrative Report 
relating to each claim within 30 days after notification of receipt of 
an administrative claim, unless the Office of the Solicitor grants 
additional time.
    (d) Litigation. During the course of any litigation, organizational 
units are responsible for providing assistance to the Office of the 
Solicitor in responding to discovery requests such as interrogatories 
and requests to produce documents, for providing assistance in analyzing 
factual and program issues, for providing witnesses for depositions and 
trials, and for assistance in producing affidavits and exhibits for use 
in the litigation.



Sec. 15.107  What must be provided in the administrative report?

    (a) The administrative report shall be in the form of a single 
memorandum in narrative form with attachments. It should contain all of 
the following elements, unless permission is obtained from the Office of 
the Solicitor to dispense with a particular element:
    (1) A brief explanation of the organization and operation of the 
program involved including statutory authority and applicable 
regulations;

[[Page 239]]

    (2) A complete description of the events that gave rise to the claim 
or litigation, including a specific response to every allegation in the 
claim or litigation;
    (3) Any information available regarding the questions of whether the 
claimant or plaintiff actually suffered the harm alleged in the claim or 
litigation and what individual or organization caused any harm which 
appears to have occurred;
    (4) Any information available regarding the damages claimed;
    (5) Any policy reasons which the organizational unit wishes to 
advance for or against settlement of the claim or litigation; and
    (6) Details of any claims the Department may have against the 
claimant or plaintiff, whether or not they appear to be related to the 
subject matter of the claim or litigation.
    (b) A copy of all documents relevant to the issues involved in the 
claim or litigation should be attached to each copy of the 
Administrative Report. Original records should not be forwarded to the 
Office of the Solicitor unless specifically requested. They should be 
preserved, however, and remain available for litigation if necessary.
    (c) Organizational units should ensure that all Administrative 
Reports are either prepared or reviewed by an official of the 
organizational unit who was not personally involved in the incident in 
question prior to filing of the claim or suit.
    (d) The Office of the Solicitor may waive the requirement of an 
Administrative Report. If the Administrative Report is waived, the 
organizational unit or units involved in the circumstances of the claim 
or litigation shall provide certification from the supervisor of the 
employee whose alleged negligent act or omission gave rise to the claim, 
certifying that the employee was acting within the scope of his or her 
employment at the time of the alleged negligent act or omission.



Sec. 15.108  Who is authorized to decide an administrative claim?

    (a) The Counsel for Claims and Compensation shall have the authority 
to consider, ascertain, adjust, determine, compromise and settle claims 
pursuant to the Federal Tort Claims Act which involve an alleged 
negligent or wrongful act or omission of an employee whose official duty 
station is the Department's national office in Washington, DC, or which 
involve aggregate claims in excess of $25,000, or which involve a new 
point of law or a question of policy.
    (b) Regional Solicitors and the Associate Regional Solicitors are 
authorized to consider, ascertain, adjust, determine, compromise and 
settle claims arising in their respective jurisdictions pursuant to the 
Federal Tort Claims Act where the aggregate claimed does not exceed 
$25,000 in amount and which do not involve a new point of law or a 
question of policy.



Sec. 15.109  What if the claim is denied?

    Denial of an administrative claim under this subpart shall be in 
writing, and notification of denial shall be sent to the claimant, or 
his or her attorney or legal representative by certified or registered 
mail. The notification of final denial shall include a statement of the 
reasons for the denial and shall include a statement that, if the 
claimant is dissatisfied with the Department's action, that claimant may 
file suit in an appropriate U.S. District Court not later than 6 months 
after the date of mailing of the notification.



Sec. 15.110  What must a claimant do if the administrative claim is
approved?

    (a) Payment of a claim approved under this subpart is contingent 
upon claimant's execution of the appropriate forms, such as the SF-194, 
SF-196, or SF-197, in accordance with instructions by the Department of 
Justice and/or the Judgment Fund. When a claimant is represented by an 
attorney, the voucher for payment shall designate the claimant as payee 
(as the beneficial interest holder), and the check shall be delivered to 
the attorney whose address appears on the voucher.
    (b) Acceptance by the claimant, or his or her agent or legal 
representative, of an award, compromise, or settlement under 28 U.S.C. 
2672 or 28 U.S.C. 2677 is final and conclusive on the claimant, his or 
her agent or legal representative, and any other person

[[Page 240]]

on whose behalf or for whose benefit the claim has been presented and 
constitutes a complete release of any claim against the United States 
and against any officer or employee of the Government whose act or 
omission gave rise to the claim by reason of the same subject matter.



Sec. 15.111  If the administrative claim is approved, how is the
award paid?

    (a) Any award, compromise, or settlement in the amount of $2,500 or 
less made pursuant to this section shall be paid by the Secretary of 
Labor out of appropriations available to the Department.
    (b) Payment of an award, compromise, or settlement in an amount in 
excess of $2,500 made pursuant to this subpart shall be made in 
accordance with 28 CFR 14.10.
    (c) An award, compromise or settlement of a claim under 28 U.S.C. 
2672 and this subpart in excess of $25,000 may be effected only with the 
prior written approval of the Attorney General or his designee. For the 
purpose of this subpart, a principal claim and any derivative or 
subrogated claim shall be treated as a single claim.



 Subpart C_Claims Under the Military Personnel and Civilian Employees' 
                           Claims Act of 1964



Sec. 15.200  What is a claim under the MPCECA and who may file such
a claim?

    (a) A claim under the MPCECA for damage or loss is allowable only if 
the property involved was being used incident to service with the 
Department.
    (b) A claim may be made under this subpart by an employee of the 
Department or by a spouse or authorized agent, or legal representative 
on behalf of the employee. If the employee is deceased, the claim may be 
filed by a survivor in the following order of preference: Spouse, 
children, parent, brother or sister or the authorized agent or legal 
representative of such person or persons.
    (c) An MPCECA claim may not be made by or for the benefit of an 
insurance company, subrogee, assignee, conditional vendor or other third 
party.



Sec. 15.201  Where should the MPCECA claim be filed?

    (a) If the claimant's official duty station is at the Department's 
national office in Washington, DC, or if the claim is for an amount in 
excess of $25,000, the claim should be filed with the Counsel for Claims 
and Compensation, Office of the Solicitor of Labor, U.S. Department of 
Labor, Suite S4325, 200 Constitution Avenue NW., Washington, DC, 20210.
    (b) In all other cases, the claimant shall address the claim to the 
regional or branch office of the Office of the Solicitor servicing the 
claimant's official duty station.



Sec. 15.202  How is a claim filed under the MPCECA?

    (a) A claim under this subpart must be presented in writing. A 
sample claim, located on the Department's Office of the Solicitor, 
Federal Employees' and Energy Workers' Compensation Division Web site at 
www.dol.gov, is provided as an example for convenience of filing. The 
SF-95 for FTCA claims is not an appropriate form for a MPCECA claim.
    (b) The claimant is responsible for substantiating ownership or 
possession, the facts surrounding the loss or damage, and the value of 
the property. Any claim filed must be accompanied by the following:
    (1) A written statement, signed by the claimant or his or her 
authorized agent, setting forth the circumstances under which the damage 
or loss occurred. This statement may also include:
    (i) A description of the type, design, model number or other 
identification of the property.
    (ii) The date of purchase or acquisition and the original cost of 
the property.
    (iii) The location of the property when the loss or damage occurred.
    (iv) The value of the property when lost or damaged.
    (v) The actual or estimated cost of the repair of any damaged item.
    (vi) The purpose of and authority for travel, if the loss or damage 
occurred incident to transportation or to the use of a motor vehicle.

[[Page 241]]

    (vii) Any and all available information as to the party responsible 
for the loss or damage, if such party is someone other than the 
claimant, and all information as to insurance contracts, whether held by 
the claimant or by the party responsible.
    (2) Copies of all available and appropriate documents such as bills 
of sale, estimates of repairs, or travel orders. In the case of an 
automobile, the claimant must file two estimates of repair or a 
certified paid bill showing the damage incurred and the cost of all 
parts, labor and other items necessary to the repair of the vehicle or a 
statement from an authorized dealer or repair garage showing that the 
cost of such repairs exceeds the value of the vehicle. The Office of the 
Solicitor may waive the requirement of two estimates of repair.
    (3) A copy of the power of attorney or other authorization if 
someone other than the employee files the claim.
    (4) A statement from the employee's immediate supervisor confirming 
that possession of the property was reasonable, useful or proper under 
the circumstances and that the damage or loss was incident to service.



Sec. 15.203  When should a claim under the MPCECA be filed?

    A claim under this subpart may be allowed only if it is filed in 
writing within 2 years after accrual of the claim. For the purpose of 
this part, a claim accrues at the later of:
    (a) The time of the accident or incident causing the loss or damage;
    (b) Such time as the loss or damage should have been discovered by 
the claimant by the exercise of due diligence; or
    (c) Such time as cause preventing filing no longer exists or as war 
or armed conflict ends, whichever is earlier, if a claim otherwise 
accrues during war or an armed conflict or has accrued within 2 years 
before war or an armed conflict begins, and for cause shown.



Sec. 15.204  Are there limits on claims under the MPCECA?

    (a) The maximum amount that can be paid for any claim under the 
MPCECA is $40,000, or, if the claim arises from emergency evacuation or 
extraordinary circumstances, up to $100,000, and property may be 
replaced in kind at the option of the Government. 31 U.S.C. 3721(b)(1).
    (b) The Department is not an insurer and does not underwrite all 
personal property losses that an employee may sustain. Employees are 
encouraged to carry private insurance to the maximum extent practicable 
to avoid losses, which may not be recoverable from the Department.



Sec. 15.205  What types of claims for property damage are allowed under
the MPCECA?

    (a) Claims for property damage are allowed under the MPCECA only if 
the property involved was being used incident to service with the 
Department and:
    (l) The damage or loss was not caused wholly or partly by the 
negligent or wrongful act or omission of the claimant, his or her agent, 
the members of his or her family, or his or her private employee (the 
standard to be applied is that of reasonable care under the 
circumstances); and
    (2) The possession of the property lost or damaged and the quantity 
and the quality possessed is determined by the claimant's supervisor to 
have been reasonable, useful or proper under the circumstances; and
    (3) The claim is substantiated by proper and convincing evidence.
    (b) Claims otherwise allowable under this subpart shall not be 
disallowed solely because the claimant was not the legal owner of the 
property for which the claim is made.



Sec. 15.206  What claims arising at a residence or Telework location
may be covered under the MPCECA?

    (a) Claims arising at a residence, Telework center or other 
flexiplace location may be covered under the MPCECA.
    (b) For the purpose of this subpart, residence means a house, 
apartment or other location that is a Department employee's principal 
abode.
    (c) Claims for property damage at an alternative work location at 
which the employee is performing duties pursuant to an approved Telework 
agreement may be covered by the MPCECA

[[Page 242]]

if the property was being used incident to service with the Department, 
as, for the purposes of this subpart, that location is considered to be 
an official duty station. Under most circumstances, property damage will 
only be allowed if it occurs at or in connection with the employee's 
workstation.
    (d) Claims under the MPCECA at a residence not covered by paragraph 
(c) of this section may be allowable for damage to, or loss of, property 
arising from fire, flood, hurricane, other natural disaster, theft, or 
other unusual occurrence, if the property was being used incident to 
service with the Department, while such property is located at:
    (1) Residences within the 50 States or the District of Columbia that 
were assigned to the claimant or otherwise provided in kind by the 
United States; or
    (2) Residences outside the 50 States and the District of Columbia 
that were occupied by the claimant, whether or not they were assigned or 
otherwise provided in kind by the United States, except when the 
claimant is a civilian employee who is a local inhabitant; or
    (3) Any warehouse, office, working area or other place (except 
residences) authorized or apparently authorized for the reception or 
storage of property.



Sec. 15.207  What are examples of claims allowed under the MPCECA?

    The following are examples of the principal types of allowable 
claims, but these examples are not exclusive; other claims may be 
allowed, unless hereinafter excluded:
    (a) Transportation or travel losses. Claims may be allowed for 
damage to, or loss of, property incident to transportation or storage 
pursuant to order or in connection with travel under orders, including 
property in the custody of a carrier, an agent or agency of the 
Government, or the claimant.
    (b) Enemy action or public service. Claims may be allowed for damage 
to, or loss of, property as a direct consequence of:
    (1) Enemy action or threat thereof, or terrorism, combat, guerrilla, 
brigandage, or other belligerent activity, or unjust confiscation by a 
foreign power or its nationals.
    (2) Action by the claimant to quiet a civil disturbance or to 
alleviate a public disaster.
    (3) Efforts by the claimant to save human life or Government 
property.
    (c) Property used for the benefit of the Government. Claims may be 
allowed for damage to, or loss, of property when used for the benefit of 
the Government at the request of, or with the knowledge and consent of 
superior authority.
    (d) Electronics and cellular phones. Claims may be allowed for loss 
of, or damage to, cellular phones, personal data assistants and similar 
communication and electronic devices subject to the limitations in 
Sec. 15.209(e).
    (e) Clothing and accessories. Claims may be allowed for damage to, 
or loss of, clothing and accessories customarily worn on the person, 
such as eyeglasses, hearing aids, or dentures subject to the limitations 
in Sec. 15.209(e).
    (f) Expenses incident to repair. Claimants may be reimbursed for the 
payment of any sales tax incurred in connection with repairs to an item. 
The costs of obtaining estimates of repair (subject to the limitations 
set forth in Sec. 15.208(c)) are also allowable.



Sec. 15.208  What are the restrictions on otherwise allowable claims?

    (a) Money or currency. Claims may be allowed for loss of money or 
currency (which includes coin collections) only when lost incident to 
fire, flood, hurricane, other natural disaster, or by theft from 
residence (as limited by Sec. 15.206). In incidents of theft from a 
residence, it must be conclusively shown that the residence was locked 
at the time of the theft. Reimbursement for loss of money or currency is 
limited to an amount, which is determined to have been reasonable for 
the claimant to have had in his or her possession at the time of the 
loss.
    (b) Government property. Claims may only be allowed for property 
owned by the United States for which the claimant is financially 
responsible to an agency of the Government other than the Department.
    (c) Estimate fees. Claims may include fees paid to obtain estimates 
of repairs only when it is clear that an estimate could not have been 
obtained without paying a fee. In that case, the fee may

[[Page 243]]

be allowed only in an amount determined to be reasonable in relation to 
the value of the property or the cost of the repairs.
    (d) Automobiles and motor vehicles. Claims may only be allowed for 
damage to, or loss of automobiles and other motor vehicles if:
    (1) Such motor vehicles were required to be used for official 
Government business (official Government business, as used here, does 
not include travel, or parking incident thereto, between residence and 
office, or use of vehicles for the convenience of the owner. However, it 
does include travel, and parking incident thereto, between a residence 
and an assigned place of duty specifically authorized or otherwise shown 
to be permitted by the employee's supervisor as being more advantageous 
to the Government); or
    (2) Shipment of such motor vehicles was being furnished or provided 
by the Government, subject to the provisions of Sec. 15.210.



Sec. 15.209  What claims are not allowed?

    (a) Unassigned residences in United States. Property loss or damage 
in quarters occupied by the claimant within the 50 States or the 
District of Columbia that were not assigned to him or otherwise provided 
in kind by the United States or part of an approved Telework agreement.
    (b) Business property. Property used for business or profit.
    (c) Unserviceable property. Wornout or unserviceable property.
    (d) Illegal possession. Property acquired, possessed or transferred 
in violation of the law or in violation of applicable regulations or 
directives.
    (e) Articles of extraordinary value. Valuable articles, such as 
watches, jewelry, furs, clothes, electronics or other articles of 
extraordinary value. This prohibition does not apply to articles in the 
personal custody of the claimant or articles properly checked, if the 
claimant has taken reasonable protection or security measures.
    (f) Intangible property. Loss of property that has no extrinsic and 
marketable value but is merely representative or evidence of value (such 
as a non-negotiable stock certificate or warehouse receipt) is not 
compensable. Intangible value is not compensable.
    (g) Incidental expenses and consequential damages. The MPCECA and 
this subpart authorize payment for loss of or damage to personal 
property only. Except as provided in Sec. 15.207(f), consequential 
damages or other types of loss or incidental expenses (such as loss of 
use, interest, carrying charges, cost of lodging or food while awaiting 
arrival of shipment, attorney fees, telephone calls, cost of 
transporting claimant or family members, inconvenience, time spent in 
preparation of claim, or cost of insurance premiums) are not 
compensable.
    (h) Real property. Damage to real property is not compensable. In 
determining whether an item is considered to be an item of personal 
property, as opposed to real property, normally, any movable item is 
considered personal property even if physically joined to the land.
    (i) Commercial property. Articles acquired or held for sale or 
disposition by other commercial transactions on more than an occasional 
basis, or for use in a private profession or business enterprise.
    (j) Commercial storage. Property stored at a commercial facility for 
the convenience of the claimant and at his or her expense.
    (k) Minimum amount. Loss or damage amounting to less than $40.



Sec. 15.210  What affect does insurance have on a claim under the
MPCECA?

    In the event the property, which is the subject of the claim, was 
lost or damaged while in the possession of a commercial carrier or was 
insured, the following procedures will apply:
    (a) Whenever property is damaged, lost or destroyed while being 
shipped pursuant to authorized travel orders, the owner must file a 
written claim for reimbursement with the last commercial carrier known 
or believed to have handled the goods, or the carrier known to be in 
possession of the property when the damage or loss occurred, according 
to the terms of its bill of lading or contract, before submitting a 
claim against the Government under this subpart.

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    (b) Whenever property is damaged, lost or destroyed incident to the 
claimant's service and is insured in whole or in part, the claimant 
should make demand in writing against the insurer for reimbursement 
under the terms and conditions of the insurance coverage, prior to the 
filing of the claim against the Government, unless, in the subsequent 
determination of the deciding official, the filing of such a demand was 
impracticable or inequitable. For example, if the value of a claim is 
$535 and the insurance deductible is $500, the deciding official may 
determine that no claim need be made against the insurer.
    (c) Unless the deciding official determines that no demand should 
have been or need be made, failure to make a demand on a carrier or 
insurer or to make all reasonable efforts to protect and prosecute 
rights available against a carrier or insurer and to collect the amount 
recoverable from the carrier or insurer may result in reducing the 
amount recoverable from the Government by the maximum amount which would 
have been recoverable from the carrier or insurer had the claim been 
timely or diligently prosecuted.
    (d) Following the submission of the claim against the carrier or 
insurer, the claimant may immediately submit his claim against the 
Government in accordance with the provisions of this subpart, without 
waiting until either final approval or denial of the claim is made by 
the carrier or insurer.
    (1) Upon submitting his or her claim, the claimant shall certify in 
the claim that he or she has or has not gained any recovery from a 
carrier or insurer, and enclose all correspondence pertinent thereto.
    (2) If final action has not been taken by the carrier or insurer