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Walsh-Healey Public Contracts Act (PCA)

The Federal Walsh-Healey Public Contracts Act (PCA) applies to contracts that exceed or may exceed $10,000 entered into by any agency or instrumentality of the United States for the manufacture or furnishing of materials, supplies, articles, or equipment. The Act establishes minimum wage, maximum hours, and safety and health standards for work on such contracts, and prohibits the employment on contract work of convict labor (unless certain conditions are met) and children under 16 years of age. The employment of homeworkers (except handicapped clients of bona fide sheltered workshops) on a covered contract is not permitted. The Act also requires the keeping of certain records.

In addition to its coverage of prime contractors, the Act under certain circumstances applies to secondary contractors performing work under contracts awarded by the Government prime contractor.

The Walsh-Healey Public Contracts Act and the Fair Labor Standards Act (FLSA) may apply simultaneously to the same employer.

All provisions of the Act except the safety and health requirements are administered by the Wage and Hour Division of the U.S. Department of Labor.

Coverage

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

The Act does not apply to executive, administrative, and professional employees, or to outside salespersons exempt from the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA). Nor does it apply to certain office and custodial workers.

Certain contracts are not covered by this Act. They include:

·          Purchases of materials, supplies, articles, or equipment as may usually be bought in the "open market";

·          Purchases of perishables;

·          Purchases of agricultural products from the original producers;

·          Contracts made by the Secretary of Agriculture for the purchase of agricultural commodities or products;

·          Contracts for public utility services and certain transportation and communication services; and

·          Supplies manufactured outside the U.S. (including Puerto Rico) or the Virgin Islands.

Minimum Wage

Covered employees must be paid not less than the current Federal minimum wage rate, as specified in the Fair Labor Standard Act (FLSA). The employers may pay special lower rates to disabled workers if they obtain special certificates for a Special Minimum Wage (SMW) under Section 14(c) of the FLSA from the Department of Labor.

Apprentices and trainees may be employed at less than minimum wage rates. Apprentices must be employed pursuant to an apprenticeship program registered with the Department of Labor or with a state apprenticeship agency recognized by the Department. Trainees must be employed pursuant to a training program certified by the Department.

Fringe Benefits

Supply contracts do not require fringe benefits.

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 40 a week. Overtime is due on the basis of the total hours spent in all work, Government and non-Government, performed by the employee in any week in which covered work is performed.

Child Labor

The Act prohibits the employment of youths less than 16 years of age. Employers may protect themselves against unintentional child labor violations by obtaining certificates of age. State employment or age certificates are acceptable.

Convict Labor

The Act prohibits the employment of convicts, except under certain conditions. Not included in convict labor are persons paroled, pardoned, or discharged from prison, or prisoners participating in a work-release program.

Safety and Health

No covered work may be performed in plants, factories, buildings, or surroundings or under work conditions that are unsanitary or hazardous or dangerous to the health and safety of the employees engaged in the performance of the contract. The safety and health provisions of the Walsh-Healey Public Contracts Act are administered by the Occupational Safety and Health Administration.

Responsibility for Secondary Contractors

Prime contractors are liable for violations of the act committed by their covered secondary contractors.

Penalties and Sanctions

Contractors and subcontractors who violate the Act may be subject to a variety of penalties. The underpayment of wages and overtime pay may result in the withholding of contract payments in amounts sufficient to reimburse the underpayment. The penalty for employing underage minors or convicts is $10 per day per person, for which contract payments may also be withheld. The Department of Labor may also bring legal action to collect wage underpayment and fines for illegally employing minors and convicts. Willful violations may subject the employer to cancellation of the current contract and debarment from future Federal contracts for a three-year period.

After an investigator has served a formal complaint to the contractor, a hearing is held before an administrative law judge. If the respondent has violated the Act, he or she can appeal the decision by filing a petition for review with the Administrative Review Board. Final determinations on violations and debarment may be appealed to and are enforceable through the Federal courts.

Additional Information

Comprehensive information, including legislation, regulations, and rules about the Walsh-Healey Public Contracts Act (PCA) is available online at:
http://www.dol.gov/esa/whd/contracts/pca.htm

For additional information, you may call the U.S. DOL Wage-Hour toll-free information and helpline, available 8am to 5pm in your time zone, at 1-866-4USWAGE (1-866-487-9243).

You may also visit the DOL Wage-Hour website at:
http://www.dol.gov/esa/whd/

For more information about the special minimum wage in specific situations, contact your local U.S. Department of Labor Wage and Hour District Office. It is listed in most telephone directories under United States Government, Labor Department. Contact information and service areas, listed by State, are available online at:
http://www.dol.gov/esa/contacts/whd/america2.htm

For more information about the SCA, Section 14(c) and other provisions of the FLSA, review the Fact Sheets that address Section 14(c) compliance issues located at:
http://www.dol.gov/esa/regs/compliance/whd/whdcomp.htm

The complete text of the Walsh-Healey Public Contracts Act is available online at:
http://www4.law.cornell.edu/uscode/41/35.html

Extensive DOL regulations concerning the Walsh-Healey Public Contracts Act (41 CFR Chapter 50 Sections 201-205, 210) are available online in several sections, as listed below.

· General Regulations on Public Contracts :
http://www.dol.gov/dol/allcfr/ESA/Title_41/Part_50-201/toc.htm

· Minimum Wage Determinations :
http://www.dol.gov/dol/allcfr/ESA/Title_41/Part_50-202/toc.htm

· Rules of Practice:
http://www.dol.gov/dol/allcfr/ESA/Title_41/Part_50-203/toc.htm

· Safety and Health Standards for Federal Supply Contracts:
http://www.dol.gov/dol/allcfr/ESA/Title_41/Part_50-204/toc.htm

· Enforcement of Safety and Health Standards by State Officers and Employees :
http://www.dol.gov/dol/allcfr/ESA/Title_41/Part_50-205/toc.htm

· Statements of General Policy and Interpretation Not Directly Related to Regulations :
http://www.dol.gov/dol/allcfr/ESA/Title_41/Part_50-210/toc.htm

Source

Information for this topic was drawn from the U.S. DOL website at:
http://www.dol.gov/asp/programs/guide/walshh.htm
http://www.dol.gov/esa/regs/compliance/posters/pdf/govc.pdf

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