52.222-4 Contract Work Hours and Safety Standards -Overtime Compensation
Source: FAR 52.222-4 on acquisition.gov
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.
As prescribed in 22.305 , insert the following clause:
Contract Work Hours and Safety Standards-Overtime Compensation (May 2018)
(a) Overtime requirements. No Contractor or subcontractor employing laborers or mechanics (see Federal Acquisition Regulation 22.300) shall require or permit them to work over 40 hours in any workweek unless they are paid at least 1 and 1/2 times the basic rate of pay for each hour worked over 40 hours.
(b) Violation; liability for unpaid wages; liquidated damages. The responsible Contractor and subcontractor are liable for unpaid wages if they violate the terms in paragraph (a) of this clause. In addition, the Contractor and subcontractor are liable for liquidated damages payable to the Government. The Contracting Officer will assess liquidated damages at the rate specified at 29 CFR 5.5(b)(2) per affected employee for each calendar day on which the employer required or permitted the employee to work in excess of the standard workweek of 40 hours without paying overtime wages required by the Contract Work Hours and Safety Standards statute (found at http://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title40-chapter37&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0MC1jaGFwdGVyMzctZnJvbnQ%3D%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim" target="_blank">40 U.S.C. chapter 37). In accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990 (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title28-section2461&num=0&edition=prelim" target="_blank">28 U.S.C. 2461 Note), the Department of Labor adjusts this civil monetary penalty for inflation no later than January 15 each year.
(c) Withholding for unpaid wages and liquidated damages. The Contracting Officer will withhold from payments due under the contract sufficient funds required to satisfy any Contractor or subcontractor liabilities for unpaid wages and liquidated damages. If amounts withheld under the contract are insufficient to satisfy Contractor or subcontractor liabilities, the Contracting Officer will withhold payments from other Federal or federally assisted contracts held by the same Contractor that are subject to the Contract Work Hours and Safety Standards statute
(d) Payrolls and basic records.
(1) The Contractor and its subcontractors shall maintain payrolls and basic payroll records for all laborers and mechanics working on the contract during the contract and shall make them available to the Government until 3 years after contract completion. The records shall contain the name and address of each employee, social security number, labor classifications, hourly rates of wages paid, daily and weekly number of hours worked, deductions made, and actual wages paid. The records need not duplicate those required for construction work by Department of Labor regulations at 29 CFR 5.5(a)(3) implementing the Construction Wage Rate Requirements statute.
(2) The Contractor and its subcontractors shall allow authorized representatives of the Contracting Officer or the Department of Labor to inspect, copy, or transcribe records maintained under paragraph (d)(1) of this clause. The Contractor or subcontractor also shall allow authorized representatives of the Contracting Officer or Department of Labor to interview employees in the workplace during working hours.
(e) Subcontracts. The Contractor shall insert the provisions set forth in paragraphs (a) through (d) of this clause in subcontracts that may require or involve the employment of laborers and mechanics and require subcontractors to include these provisions in any such lower tier subcontracts. The Contractor shall be responsible for compliance by any subcontractor or lower-tier subcontractor with the provisions set forth in paragraphs (a) through (d) of this clause.
(End of clause)