WALSH-HEALEY PUBLIC CONTRACTS ACT

41 U.S.C. 35-45

Summary and Description

The Public Contracts Act sets basic labor standards for work done on United States Government contracts which exceed $10,000 in value for materials, supplies, articles, equipment, or naval vessels. In general, these standards apply to all persons engaged in the manufacture or furnishing, including the fabrication, assembling, handling, or shipping of the contracted items, except those in bona fide executive, administrative or professional positions, or those engaged in office, custodial, or maintenance work.

The act requires that the contractor be a manufacturer or regular dealer in the articles called for in the contract. Under special circumstances, as, for example, where it is the regular practice in an industry for the prime contractor to manufacture certain items, secondary contractors are covered.

MINIMUM WAGE RATES

The Secretary of Labor is authorized to determine prevailing minimum wages for similar work in an industry on the basis of standards provided in the act. Such minimum wage determinations generally are issued by the Secretary after a public hearing. All workers engaged in performance of a contract let under the act must be paid not less than the minimum so set by the Secretary. Under current determinations, all covered employees must be paid not less than $2.00 effective January 1, 1975 and $2.30 an hour effective January 1, 1976, unless a higher rate is set for a particular industry.

OVERTIME

Covered workers must be paid at least one and one-half times their basic rate of pay for all hours worked in excess of 8 a day or 40 a week, whichever number of overtime hours is greater. Overtime is due on the basis of the total hours spent in all work, Government and nonGovernment, performed by the employee in any week in which covered work is performed.

CHILD LABOR

The law prohibits employment of persons under 16 years of age.

CONVICT LABOR

The law prohibits the employment of convict labor.

SAFETY AND HEALTH

The contract may not be performed nor the materials, supplies, articles, or equipment manufactured or furnished under working conditions which are unsanitary or hazardous or dangerous to the health and safety of employees engaged in the performance of the contract. Compliance with the safety, sanitary, and factory inspection laws of the State in which the work is performed is prima facie but not conclusive evidence of compliance with this provision of the act.

HOMEWORK

Industrial homework is prohibited.

BEGINNERS, APPRENTICES, AND HANDICAPPED WORKERS

Under specified conditions, wage determinations of the Secretary for some industries permit payment of less than the established minimum wage to beginners. When employed in accordance with special regulations, apprentices, student-learners, and handicapped workers may also be employed at less than the prevailing minimum wages.

EXEMPTIONS

The act specifically exempts certain types of contracts, including contracts for transportation by common carriers under published tariffs; utility services; perishable agricultural products; and rentals.

EXCEPTIONS

Upon a written finding of the head of the contracting agency that operations of the act will seriously impair the conduct of Government business, the Secretary of Labor is authorized to make exceptions in certain cases when justice or public interest will be served thereby.

RECORDS: POSTING NOTICES

Contractors are required to display a copy of the Public Contracts Act poster, with applicable attachment, wherever work is being performed under the act. Contractors also are required to keep specified records, including injury frequency rates, which are open for inspection by representatives of the Department of Labor.

EMPLOYER LIABILITIES

A contractor who violates the law is liable to the United States for: A sum equal to the amount due employees under the law on account of underpayment of wages. Such sums recovered by the Government are paid directly to the employees to whom they are due.

Ten dollars per day for each minor under 16 or convict laborer knowingly employed on the contract.

Violations of the act may result in cancellation of the contract by the awarding agency, with any additional costs charged to the original

contractor. Sums due the United States may be recovered by withholding payment of monies due or by court action.

No award of Government contracts may be made to the responsible person or firm within 3 years from the date on which the Secretary of Labor determines that a breach of contract occurred, unless the Secretary specifically recommends otherwise.

Text of Act

(Section Nos. refer to U.S. Code)

§ 35. Contracts for materials, etc., exceeding $10,000; representations and stipulations.

In any contract made and entered into by any executive department, independent establishment, or other agency or instrumentality of the United States, or by the District of Columbia, or by any corporation all the stock of which is beneficially owned by the United States (all the foregoing being hereinafter designated as agencies of the United States), for the manufacture or furnishing of materials, supplies, articles, and equipment in any amount exceeding $10,000, there shall be included the following representations and stipulations: (a) That the contractor is the manufacturer of or a regular dealer in the materials, supplies, articles, or equipment to be manufactured or used in the performance of the contract;

(b) That all persons employed by the contractor in the manufacture or furnishing of the materials, supplies, articles, or equipment used in the performance of the contract will be paid, without subsequent deduction or rebate on any account, not less than the minimum wages as determined by the Secretary of Labor to be the prevailing minimum wages for persons employed on similar work or in the particular or similar industries or groups of industries currently operating in the locality in which the materials, supplies, articles, or equipment are to be manufactured or furnished under said contract;

(c) That no person employed by the contractor in the manufacture or furnishing of the materials, supplies, articles, or equipment used in the performance of the contract shall be permitted to work in excess of eight hours in any one day or in excess of forty hours in any one week: Provided, That the provisions of this subsection shall not apply to any employer who shall have entered into an agreement with his employees pursuant to the provisions of paragraphs (1) or (2) of subsection (b) of section 207 of Title 29;

(d) That no male person under sixteen years of age and no female person under eighteen years of age and no convict labor will be employed by the contractor in the manufacture or production or furnishing of any of the materials, supplies, articles, or equipment included in such contract; and

(e) That no part of such contract will be performed nor will any of the materials, supplies, articles, or equipment to be manufactured or furnished under said contract be manufactured or fabricated in any plants, factories, buildings, or surroundings or under working conditions which are unsanitary or hazardous or dangerous to the health and safety of employees engaged in the performance of said contract. Compliance with the safety, sanitary, and factory inspection

laws of the State in which the work or part thereof is to be performed shall be prima-facie evidence of compliance with this subsection. (June 30, 1936, ch. 881, § 1, 49 Stat. 2036; May 13, 1942, ch. 306, 56 Stat. 277.)

§ 36. Same; liability for breach; cancellation; completion by Government agency; employee's wages.

Any breach or violation of any of the representations and stipulations in any contract for the purposes set forth in section 35 of this title shall render the party responsible therefor liable to the United States of America for liquidated damages, in addition to damages for any other breach of such contract, the sum of $10 per day for each male person under sixteen years of age or each female person under eighteen years of age, or each convict laborer knowingly employed in the performance of such contract, and a sum equal to the amount of any deductions, rebates, refunds, or underpayment of wages due to any employee engaged in the performance of such contract; and, in addition, the agency of the United States entering into such contract shall have the right to cancel same and to make open-market purchases or enter into other contracts for the completion of the original contract, charging any additional cost to the original contractor. Any sums of money due to the United States of America by reason of any violation of any of the representations and stipulations of said contract set forth in section 35 of this title may be withheld from any amounts due on any such contracts or may be recovered in suits brought in the name of the United States of America by the Attorney General thereof. All sums withheld or recovered as deductions, rebates, refunds, or underpayments of wages shall be held in a special deposit account and shall be paid, on order of the Secretary of Labor, directly to the employees who have been paid less than minimum rates of pay as set forth in such contracts and on whose account such sums were withheld or recovered: Provided, That no claims by employees for such payments shall be entertained unless made within one year from the date of actual notice to the contractor of the withholding or recovery of such sums by the United States of America. (June 30, 1936, ch. 881, § 2, 49 Stat. 2037.) § 37. Same; distribution of list of persons breaching contract; future contracts prohibited.

The Comptroller General is authorized and directed to distribute a list to all agencies of the United States containing the names of persons or firms found by the Secretary of Labor to have breached any of the agreements or representations required by sections 35 to 45 of this title. Unless the Secretary of Labor otherwise recommends no contracts shall be awarded to such persons or firms or to any firm, corporation, partnership, or association in which such persons or firms have a controlling interest until three years have elapsed from the date the Secretary of Labor determines such breach to have occurred. (June 30, 1936, ch. 881. § 3, 49 Stat. 2037.)

§ 38. Same; administration; officers and employees; appointment; investigations; rules and regulations.

The Secretary of Labor is authorized and directed to administer the provisions of sections 35 to 45 of this title and to utilize such Federal officers and employees and, with the consent of the State, such State and