52.222-4
Contract Work Hours and Safety Standards -Overtime Compensation
Contractors must pay overtime to laborers and mechanics for hours worked over 40 per week, maintain payroll records, and ensure all subcontractors comply, or face penalties and payment withholdings.
Overview
FAR 52.222-4, Contract Work Hours and Safety Standards – Overtime Compensation, establishes requirements for overtime pay and recordkeeping for contractors and subcontractors employing laborers or mechanics on covered federal contracts. The clause mandates that employees must be paid at least 1.5 times their basic rate for hours worked over 40 in a workweek. It also outlines liability for unpaid wages and liquidated damages, procedures for withholding payments to cover violations, and detailed payroll recordkeeping and access requirements. Contractors must flow down these requirements to all applicable subcontractors and are responsible for their compliance.
Key Rules
- Overtime Pay Requirement
- Laborers and mechanics must be paid at least 1.5 times their basic rate for hours worked over 40 in a workweek.
- Liability for Violations
- Contractors and subcontractors are liable for unpaid wages and liquidated damages if overtime requirements are violated.
- Withholding of Payments
- The Contracting Officer may withhold contract payments to cover unpaid wages and damages, including from other federal contracts if necessary.
- Payroll Records and Access
- Contractors and subcontractors must maintain detailed payroll records for 3 years after contract completion and allow government inspection and employee interviews.
- Subcontract Flowdown
- Overtime and recordkeeping requirements must be included in all applicable subcontracts and lower-tier subcontracts.
Responsibilities
- Contracting Officers: Enforce compliance, assess liquidated damages, and withhold payments as needed.
- Contractors: Ensure overtime pay, maintain records, allow inspections, and flow down requirements to subcontractors.
- Agencies: Oversee compliance and coordinate with the Department of Labor as necessary.
Practical Implications
- This clause ensures fair compensation for overtime work and protects worker rights on federal contracts.
- Contractors must implement robust payroll systems and compliance checks to avoid penalties and payment withholdings.
- Common pitfalls include failure to pay proper overtime, inadequate recordkeeping, and not flowing down requirements to subcontractors.