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Employment Law Guide

Federal Contracts-Working Conditions: Wages in Supply & Equipment Contracts

Updated: December 2016

Walsh-Healey Public Contracts Act (PCA)
41 USC §6501 et seq.; 41 CFR Parts 50-201, 202, 203, and 210

Who is Covered

The wage and hour requirements of the Walsh-Healey Public Contracts Act (PCA) are administered by the Wage and Hour Division (WHD). The PCA applies to contractors with contracts in excess of $15,000 for the manufacturing or furnishing of materials, supplies, articles, or equipment to the U.S. government or the District of Columbia. The PCA covers employees who produce, assemble, handle, or ship goods under these contracts.

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

Certain contracts are not covered by the PCA. They include:

  • Contracts to purchase materials, supplies, articles, or equipment that may usually be bought in the "open market"
  • Contracts to purchase perishables, including dairy, livestock and nursery products
  • Contracts to purchase agricultural or farm products processed for first sale by the original producers
  • Contracts made by the Secretary of Agriculture for the purchase of agricultural commodities or products of agricultural commodities
  • Contracts for public utility services and certain transportation and communication services
  • Contracts awarded to sales agents or publishers representatives for delivery of newspapers, magazines and periodicals by their publishers
  • Contracts for materials, supplies, articles, or equipment no part of which will be manufactured or furnished within the geographic limits of the States of the United States of America, Puerto Rico, the Virgin Islands, or the District of Columbia
  • Contracts administratively exempted by the Secretary of Labor in special circumstances to avoid serious impairment of government business when the exemption will serve justice or the public interest

Basic Provisions/Requirements

Covered contractors must pay employees on the contracts the federal minimum wage. The employers may pay special lower rates to apprentices, students in vocational education programs, and disabled workers if they obtain special certificates from the Department of Labor. Employees must also be paid one and one-half times their regular rate of pay for all hours worked over 40 in a workweek.

The PCA prohibits the employment of youths less than 16 years of age and incarcerated individuals, except under certain conditions. Not included are persons paroled, pardoned, or discharged from prison, or prisoners participating in a work-release program.

Employee Rights

The PCA provides employees on covered federal contracts the right to be paid at least the minimum wage for all hours worked and time and one half their regular rate of pay for overtime hours. The Wage and Hour Division( accepts complaints of alleged PCA violations.

Recordkeeping, Reporting, Notices and Posters

Notices and Posters

Every employer performing work covered by the PCA is required to post the “Employee Rights on Government Contracts”( notice (including any applicable wage determination) at the site of the work in a prominent and accessible place where it may be easily seen by employees.  There are no size requirements for the poster. The Employee Rights on Government Contracts poster is also available in Spanish(

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


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

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

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

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


There are no reporting requirements.


Contractors and subcontractors who breach the required contract terms or violate the Act may be subject to a variety of penalties. The underpayment of wages and overtime pay may result in the cancellation of the contract and/or withholding of contract payments in amounts sufficient to reimburse the underpayment. Liquidated damages and/or penalties may be assessed on a daily basis for each underage minor or incarcerated individual who is employed, for which contract payments may also be withheld. The Department of Labor may also bring legal action to collect wage underpayment and fines for underpaying workers and/or illegally employing underage minors or incarcerated individuals. Willful violations may subject the employer to cancellation of the current contract and debarment from future federal contracts for a three-year period.

Upon issuance and service of a formal complaint on the contractor, a hearing shall be scheduled before an Administrative Law Judge. The decision of the Administrative Law Judge may be appealed to the Administrative Review Board (ARB). ARB determinations on violations and debarment may be appealed to and are enforceable through the federal courts.

Relation to State, Local, and Other Federal Laws

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

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

Compliance Assistance Available

The Department of Labor provides employers, workers, and others with clear and easy-to-access information and assistance on how to comply with the Walsh-Healey Public Contracts Act. Compliance assistance related to the Act includes the PCA Compliance Assistance webpage(

DOL Contacts

Wage and Hour Division(
Contact WHD(
Tel: 1-866-4-US-WAGE (1-866-487-9243)*
*If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.

The Employment Law Guide is offered as a public resource. It does not create new legal obligations and it is not a substitute for the U.S. Code, Federal Register, and Code of Federal Regulations as the official sources of applicable law. Every effort has been made to ensure that the information provided is complete and accurate as of the time of publication, and this will continue.

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