In the event a question arises regarding the
proper basic wage rate under 29 U.S.C. 207
(e) (1) through (7), or under 29 CFR, part
778, it is suggested that State highway
department, Federal Highway Administration,
and Bureau of Public Roads personnel solicit
the advice of the nearest office of the
Wage and Hour and Public Contract Divisions,
U.S. Department of Labor.
403-4 Noncoverage: The Work Hours and Safety Act of 1962 does not apply to:
Work subject to the provisions of the
Walsh-Healey Public Contracts Act
[41 U.S.C., Sections 35-45].
General: The Federal Highway Administration and
Bureau of Public Roads, as the Federal agencies
responsible for approving the payment of Federal
monies in connection with the performance of
the contract work are primarily responsible for
the administration and enforcement of this Act.
However, compliance with the provisions of the
Act becomes a condition of Federal participation
in the project pursuant to Section 114 of
Title 23, U.S.C. Accordingly, each State
highway department, as the contracting agency,
is responsible to the Federal Highway Admin-
istration and Bureau of Public Roads for
enforcement of the overtime provisions of
Work Hours and Safety Act of 1962.
Contracting Agency Responsibility:
highway department, as contracting agency, shall
insure that:
(a) All contracts and subcontracts subject to
the Act contain the requisite contract
provisions prescribed by the Act and by
the implementing regulations (See chapter 300);
(b) The applicable Department of Labor Regulations and the requirements of this manual are complied with, including the issuance of required contracting officer's findings of fact relative to such violations, the computation and (when necessary) the withholding from the contractor of unpaid wages and sums equivalent to the requisite liquidated damages; and
(c) All instructions relative to inspections,
investigations and reports are complied
Federal Highway Administration and Bureau of
Public Roads Responsibility: The Federal
Highway Administration and Bureau of Public
Roads are responsible for administering the
enforcement of the Act and its contract
provisions. Accordingly, Regional Federal
Highway Administrators and division engineers
must insure that the State highway departments
properly enforce the Act. Regional Federal
Highway Administrators and division engineers
should take direct enforcement action in
circumstances where the States fail to do so.
General: Violations of the contract overtime
provisions render the contractor and any sub-
contractor responsible there for liable to each
affected employee for his unpaid wages. In
addition, they are liable to the United States
for liquidated damages computed in the sum
of $10.00 per man per day for each violation.
The amount of unpaid wages owed the affected
employees, plus the liquidated damages owing
the Federal Government shall be computed.
Intentional violations are a Federal
misdemeanor, punishable for each and every
offense by a fine of not more than $1,000
or by imprisonment for not more than 6
months, or by both fine and imprisonment.
Violations of these provisions may also be
grounds for terminating the contract.
Computing Liquidated Damages: Whenever the con-
tracting officer has cause to believe that over-
time underpayments have occurred for any reason,
he shall prepare a computation of the liquidated
damages applicable. Liquidated damages will be
computed for each employee for each workweek,
on the basis of one violation for each calendar
day the employee worked more than 8 hours
during the week or for each day the employee
worked over 40 hours in the workweek.
The overtime wages due the employee must be
calculated both on the 8-hour basis and the
40-hour basis. The employee should receive wages
on the basis most advantageous to him,
liquidated damages then should be computed
on the same basis.
Withholding: The actual withholding, from
progress payments otherwise due the contractor,
of sums equal to the computations of liquidated
damages need not be made until a final determi-
nation has been reached that such sums are due
the United States for contractor or subcon-
tractor violations, unless to make the progress
payment would jeopardize final collection on
behalf of the United States.
Subcontractor Underpayments:
responsible for proper overtime payment to all
laborers, mechanics, watchmen, and guards employed
on the project. The construction contract requires
all subcontracts to contain clauses implementing
the contract overtime requirements. The Comptroller
General of the United States and the U.S. Department
of Labor do not consider a subcontractor, in usual
situations, bound by labor standards provisions
which do not appear in the subcontract. Where
the required provisions do not appear in the
subcontract the contractor is alone responsible
for the underpayments. His failure to share
his responsibility by inserting the required
clauses in the subcontract is very substantial
evidence that the contractor failed to exercise
the "due care" which is required by the Act
before liquidated damages may be remitted in
whole or in part. The policy of the Bureau of
Public Roads, in such cases, is to consider the
failure to insert the subcontract clauses a
virtual estoppel against a contractor claim
that underpayments were caused by him "inadvert-
ently, notwithstanding the exercise of due care"
Reports on all cases, therefore, involving sub-
contractor overtime underpayments must include
a statement by the contracting officer whether
or not the subcontract properly included the
required labor standards clauses. It is not
expected, except in unusual circumstances, that
contracting officers, Bureau of Public Roads
or Federal Highway Administration personnel
will recommend foregoing or mitigating the
liquidated damages due from the contractor in
connection with performance of subcontracts
which were not properly constituted.
In every case where it is necessary to compute liquidated damages the contractor (and subcontractor(s), if appropriate shall be notified by the contracting officer, in writing, the amount of and the reasons for the computations. Unless the contracting officer is in possession of all the facts surrounding the underpayments, he shall ask the contractor for an explanation. A copy of the written notification shall be sent concurrently to the division office for forwarding to the regional office.
Contracting Officer Recommendations:
possessed with the facts surrounding the
underpayments, the contracting officer shall
write to the Regional Federal Highway Admin-
istrator. In addition to stating whether or
not the underpayments have been corrected,
along with submission of amended certified
payrolls, the contracting officer shall either
recommend retention of the damages in full,
or remission in whole or in part, giving the
reasons for his recommendation.
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