U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

PREVAILING WAGE RESOURCE BOOK 2010 COVERAGE 

 INTRODUCTION TO THE 

 LABOR STANDARDS STATUTES 

 COVERAGE 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

PREVAILING WAGE RESOURCE BOOK 2010 COVERAGE 

DAVIS-BACON ACT 

(DBA)

DAVIS-BACON RELATED ACTS 

(DBRA)

DISTINGUISHING DBA VS. DBRA 

FAIR LABOR STANDARDS ACT 

(FLSA) 

CONTRACT WORK HOURS AND SAFETY STANDARDS ACT 

(CWHSSA)

COPELAND “ANTI-KICKBACK” ACT 

(CA)

WALSH-HEALEY PUBLIC CONTRACTS ACT 

(PCA)

MCNAMARA-O'HARA SERVICE CONTRACT ACT 

(SCA)

INTERACTION AMONG GOVERNMENT CONTRACTS 

DISPUTES CONCERNING COVERAGE DETERMINATIONS 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

PREVAILING WAGE RESOURCE BOOK 2010 COVERAGE 

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DAVIS-BACON ACT (DBA) 

40 U.S.C. §§ 3141-3144 and 3146-3148 

Davis-Bacon Act (DBA)

◊ Enacted in 1931, amended in 1935 and 1964 

 1935 amendments - predetermination language 

 1964 amendments - fringe benefits 

 2002 Congress revised without substantive changes, and codified the 

 DBA provisions at 40 U.S.C. 3141 et seq.

Purpose of DBA

◊ To protect communities and workers from the economic disruption caused by 

competition arising from non-local contractors coming into an area and obtaining 

federal construction contracts by underbidding local wage levels. 

DBA Requirements

◊ Requires payment of locally prevailing wages and fringe benefits to laborers and 

mechanics employed on federal government contracts in excess of $2,000 for 

construction, alteration, or repair (including painting and decorating) of public 

buildings or public works. 

 Examples:

1. General Services Administration contracts to build federal office 

buildings. 

2. Department of Defense contracts to paint and remodel a military base 

office building. 

◊ Prevailing wages are determined in advance by the DOL National Office and 

included in the bid specifications for covered contracts. 

◊ The language of the Davis-Bacon Act requires contractors and subcontractors

to pay “all mechanics and laborers employed directly on the site of the work, 

unconditionally not less often than once a week, and without subsequent 

deduction or rebate on any account, the full amounts accrued at time of payment, 

computed at wage rates not less than those stated in the advertised specifications, 

regardless of any contractual obligation which may be alleged to exist 

between the contractor or subcontractor and the laborers and mechanics.” 

40 U.S.C. § 3142. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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 ◊◊ DBA requirements apply to contractors and subcontractors. 

 ◊◊ “Laborers or mechanics” must be paid at least “prevailing wages.” 

 ◊◊ DBA applies only to employment on the “site of the work.” 

 ◊◊ The laborers and mechanics must be paid weekly. 

 ◊◊ Persons performing the duties of laborers and mechanics must be paid 

the prevailing wage rate regardless of any contractual arrangement, 

e.g., an independent contractor or owner-operator relationship. 

 ◊◊ The wage determination (including additional classifications and 

wage rates approved under the “conformance” process, and the DavisBacon poster WH-1321 must be posted by the contractor and its 

subcontractors at the site of the work in a prominent and accessible 

place where it can be easily seen by the workers. 

DBA Coverage 

◊ The DBA applies to contracts “in excess of $2,000 to which the Federal 

Government or the District of Columbia is a party for construction, 

alteration, or repair, including painting and decorating, of public buildings 

and public works of the Government or the District of Columbia located in a 

State or the District of Columbia.” 40 U.S.C. § 3142. 

 In considering DB coverage on contracts in excess of $2,000, three criteria apply: 

 (1) Is the agreement a contract to which the Federal Government or the District 

of Columbia is a party? 

 (2) Is the agreement a “contract for construction”? 

 (3) Is the “contract for construction” a contract for the construction of a public 

building or public work of the United States or the District of Columbia? 

In this connection, “public building or public work” are defined as a 

“building or work, the construction, prosecution, completion, or repair of 

which, as defined above, is carried on directly by authority of or with 

funds of a federal agency to serve the interest of the general public 

regardless of whether title thereof is in a federal agency.” 29 C.F.R. 

§ 5.2(k). 

◊ The DBA applies to public buildings or public works of the Federal Government 

or the District of Columbia within the geographic limits of the 50 States of the 

United States and the District of Columbia. 
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 The DBA does not apply to federal construction contracts in Guam, Puerto Rico, 

the Virgin Islands or other territories; however, some “related Acts” which 

provide federal assistance to in these territories do require the payment of DB 

prevailing wage rates. 

◊ Lease Construction Contracts

 WHD All Agency Memorandum No. 176, advises that the application of the 

DBA can apply to certain federal lease contracts that also call for construction of 

a public work or building. DBA application to any lease contract can be 

determined only by reviewing the specific facts of the particular contract. 

Among the actors to be considered in determining whether a lease contract is 

subject to the Act are: 

 ◊◊ Length of the lease, 

 ◊◊ The extent of government involvement in the construction project 

 (e.g., the building is built to government specifications and the work 

is subject to periodic inspection by the government), 

 ◊◊ The extent to which the building is used for private rather than public 

purposes, 

 ◊◊ The extent to which the costs of the construction will be paid for by 

the lease payments, and 

 ◊◊ Whether the contract is written to avoid application of the DBA. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

PREVAILING WAGE RESOURCE BOOK 2010 COVERAGE 

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DAVIS-BACON RELATED ACTS (DBRA) 

DBRA Purpose and Requirements

◊ Congress has extended DB prevailing wage requirements to other laws – related 

Acts – which provide federal assistance for construction through: 

 ◊◊ Grants 

 ◊◊ Loans 

 ◊◊ Loan guarantees 

 ◊◊ Insurance 

 (as contrasted with direct federal government contracts for construction). 

DBRA Coverage

◊ Most of the related Acts are listed in 29 C.F.R. § 5.1(a). These laws include by 

reference the requirements for payment of prevailing wages determined in 

accordance with the DBA. 

 Examples:

 ◊◊ Federal Highway Administration provides grants to states for the 

reconstruction of roads and bridges on federal-aid highways. 

 ◊◊ U.S. Department of Housing and Urban Development (HUD) finances the 

construction of low income residences on housing authority projects. 

 ◊◊ Other federal agencies which assist construction through grants, loans, loan 

guarantees and insurance include the Departments of Health and Human 

Services, Education, and Environmental Protection Agency. 

◊ The following DBRA statutes are frequently used to fund/assist construction: 

 National Housing Act 

 Housing Act of 1950 

 Federal Aid to Highways Acts 

 Federal Water Pollution Control Act 

 U.S. Housing Act of 1937 

 Housing and Community Development Act of 1974 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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◊ Some of the related Acts contain specific coverage criteria for the construction 

affected by the federal assistance they provide. Thus, a determination of whether 

the DB prevailing wage provisions apply requires an analysis of the actual labor 

standards provision in the related Act. For example: 

 ◊◊ The labor standards provision of the Housing and Community Development 

Act of 1974 does not apply to the rehabilitation of residential property that 

contains fewer than 8 units. 

 ◊◊ The DB labor standards provision of Title II of the National Affordable 

Housing Act of 1990, (HOME) does not apply if there are fewer than 

twelve HOME-assisted units in the project. 

 ◊◊ The labor standards provision of the Comprehensive Environmental 

Response, Compensation and Liability Act (CERCLA) applies only to 

projects funded in whole or in part under Section 104 of the Act and not to 

clean-ups provided/funded through other sections of that Act. 

◊ While DBA does not have any provision granting DOL the authority to waive its 

application, certain related statutes may provide for a waiver or exception by the 

administering agency. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

PREVAILING WAGE RESOURCE BOOK 2010 COVERAGE 

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DISTINGUISHING DBA VS. DBRA 

◊ DBA projects: an agency of the federal government or the District of Columbia 

signs the contract. Such as: 

 ◊◊ Department of Veterans’ Affairs 

 ◊◊ General Services Administration 

 ◊◊ Department of Defense 

 ◊◊ Department of the Interior 

◊ DBRA projects: an agency or grant recipient, rather than the federal 

government signs the construction contract. For example: 

 ◊◊ On a Department of Housing and Urban Development assisted 

project, a local housing authority or a city or town may sign the 

construction contract. 

 ◊◊ On an Environmental Protection Agency funded contract for a sewer 

project, a local public works/water-sewer authority may sign the 

construction contract. 

 ◊◊ On an interstate highway project, a state highway department signs a 

contract for highway construction. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

PREVAILING WAGE RESOURCE BOOK 2010 COVERAGE 

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FAIR LABOR STANDARDS ACT OF 1938, 

AS AMENDED (FLSA) 

29 U.S.C. 201, et seq.

Purpose of FLSA

◊ The FLSA is the federal law of most general application concerning wages and 

hours of work. For most employment. the FLSA establishes minimum wage, 

overtime pay, recordkeeping, and child labor standards. 

◊ The FLSA was enacted into law in 1938. It has been amended many times since 

to modify the scope of its coverage and revise the federal minimum wage. The 

FLSA established a nationwide overtime pay standard that continues in effect – a 

rate of not less than one and one-half times the “regular rate” of pay for all hours 

worked over 40 in a workweek. The basic minimum wage provisions of the 

FLSA are in section 6 of the Act, and overtime requirements in section 7, 

exemptions from both the minimum wage and overtime provisions in section 

13(a), and exemptions from the overtime requirements in section 13(b). 

 ◊◊ For example, under section 13(a)(1) of the FLSA, persons employed in a 

bona fide executive, administrative or professional capacity are exempt 

from that law's minimum wage and overtime requirements. The rules that 

apply to determining whether the exemption applies are in 29 C.F.R. Part 

541, which defines the terms “any employee employed in a bona fide 

executive, administrative or professional capacity.” Employees who are 

exempt from the FLSA under these rules are not covered by DBA or SCA. 

FLSA Requirements

◊ Federal Minimum Wage: The FLSA minimum wage of $6.55 per hour took 

effective on July 24, 2008; and is $7.25 per hour effective July 24, 2009. This 

minimum wage applies to covered nonexempt workers. 

◊ FLSA Overtime: Covered nonexempt employees must receive overtime pay for 

hours worked over 40 per workweek (any fixed and regularly recurring period of 

168 hours — seven consecutive 24-hour periods) at a rate not less than one and 

one-half times the regular rate of pay. The FLSA does not require overtime pay 

for work on weekends, holidays, or regular days of rest, unless overtime – work 

over 40 hours in the week – is worked on such days. 

◊ Hours Worked: Hours worked ordinarily include all the time during which an 

employee is required to be on the employer’s premises, on duty, or at a prescribed 

workplace. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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◊ Recordkeeping: Employers must display an official poster outlining the 

requirements of the FLSA. Employers must also keep employee time and pay 

records. 

◊ Youth Employment: FLSA provisions designed to protect the educational 

opportunities of minors and prohibit their employment in jobs and under 

conditions detrimental to their health or well-being allow the employment of 

youths 16 and 17 years old to be employed in any job not declared hazardous. 

There is no limit on the number of hours employees 16 years or older may work 

in any workweek. 

FLSA Coverage

◊ The FLSA establishes two ways in which an employee can be covered by its 

requirements: "enterprise coverage" and "individual coverage." 

 ◊◊ Enterprise coverage applies to employees who work for certain businesses 

or organizations (or "enterprises") which are engaged in interstate 

commerce or the production of goods for commerce and which have at least 

two employees; and gross sales of not less than $500,000 a year. Enterprise 

coverage also applies to government agencies, to schools (including 

preschools), to hospitals, and to institutions primarily engaged in the care of 

the sick, the aged, or the mentally ill who reside on the premises of such 

institutions. 

 ◊◊ In addition, when there is no enterprise coverage, FLSA standards apply to 

individual employees if they are "engaged in commerce or in the production 

of goods for commerce." Employees who come within individual coverage 

under the FLSA include those who: produce goods that will be sent out of 

state (such as a worker assembling components in a factory or a secretary 

typing letters in an office); regularly make telephone calls to persons 

located in other States; handle records of interstate transactions; are 

required to travel to other States; and perform janitorial work in buildings 

where goods are produced for shipment outside the State where the 

employee works. 

FLSA Rules Importance for Government Contracts

◊ The minimum wage and/or overtime pay requirements of the FLSA may apply 

along with the wage and fringe benefit and overtime pay requirements of the 

government contract laws discussed in this reference book. 

◊ Various terms, rules, and regulations established under the FLSA also apply to 

employment under the government contracts laws discussed in this resource 

book. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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◊ The FLSA requires employers to keep records on wages, hours and other items, 

as specified in DOL recordkeeping regulations. Most of the information is of the 

kind generally maintained by employers in ordinary business practice and in 

compliance with other laws and regulations. The following records must be kept 

with respect to employees subject to the minimum wage and/or the overtime pay 

provisions of the FLSA: 

 ◊◊ Personal information, including employee’s name, home address, 

occupation, sex, and birth date if under 19 years of age. 

 ◊◊ Hour and day when workweek begins, 

 ◊◊ Total hours worked each workday and each workweek. 

 ◊◊ Total daily or weekly straight-time earnings. 

 ◊◊ Regular hourly rate for any week when overtime is worked. 

 ◊◊ Total overtime pay for the workweek. 

 ◊◊ Deductions from or additions to wages. 

 ◊◊ Total wages paid each pay period. 

 ◊◊ Date of payment and pay period covered. 

 Records required for exempt employees differ from those for nonexempt 

workers, and special information is required for employees working under 

uncommon pay arrangements and employees to whom lodging or other facilities 

are furnished. 

◊ DOL regulations that implement the FLSA requirements are set forth in Title 29 

of the Code of Federal Regulations. For example: 

 ◊◊ 29 C.F.R. Part 519 – Records to Be Kept by Employers 

 ◊◊ 29 C.F.R. Part 531 – Wage Payments Under the Fair Labor Standards Act 

of 1938 (includes rules concerning when the reasonable cost or fair value of 

board, lodging or other facilities customarily furnished by the employer for 

the employee’s benefit may be considered part of wages) 

 ◊◊ 29 C.F.R. Part 541 – Defining and Delimiting the Terms “Any Employee 

Employed In A Bona Fide Executive, Administrative, or Professional 

Capacity (Including Any Employee Employed In the Capacity of Academic 

Administrative Personnel or Teacher In Elementary or Secondary Schools), 

or In the Capacity of Outside Salesman” 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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 ◊◊ 29 C.F.R. Part 776 – Interpretative Bulletin on the General Coverage of the 

Wage and Hour Provisions of the Fair Labor Standards Act of 1938 

 ◊◊ 29 C.F.R. Part 778 – Overtime Compensation 

 ◊◊ 29 C.F.R. Part 785 – Hours Worked 

 ◊◊ 29 C.F.R. Part 790 – General Statement As to the Effect of the Portal-toPortal Act of 1947 on the Fair Labor Standards Act of 1938 

 ◊◊ 29 C.F.R. Part 793 – Joint Employment Relationship Under Fair Labor 

Standards Act of 1938 

◊ A common problem arises where contractors hire so-called independent 

contractors, who in reality should be considered employees. In determining 

whether an individual is an independent contractor, or an employee who may be 

subject to requirements of the FLSA, “Wage and Hour Fact Sheet No. 13” 

presents factors considered to be in determining whether there is an employment 

relationship under the FLSA. Significant factors include: 

 1) The extent to which the services rendered are an integral part of the 

principal's business. 

 2) The permanency of the relationship. 

 3) The amount of the alleged contractor's investment in facilities and 

equipment. 

 4) The nature and degree of control by the principal. 

 5) The alleged contractor's opportunities for profit and loss. 

 6) The amount of initiative, judgment, or foresight in open market 

competition with others required for the success of the claimed 

independent contractor. 

 7) The degree of independent business organization and operation. 

◊ Where such questions arise, pleas0e contact a local WHD office for guidance. 

To identify the WHD Office closest to you, you may call the Wage-Hour tollfree help line at 1-866-4USWAGE (1-866-487-9243). A customer service 

representative is available to assist you from 8am to 5pm in your time zone. 

Alternatively, see: http://www.dol.gov/whd/contact_us.htm 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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CONTRACT WORK HOURS AND SAFETY STANDARDS ACT 

(CWHSSA) 

40 U.S.C. §§ 3701-3708 

Purpose of CWHSSA

◊ Enacted in 1962 – consolidated a number of “eight hour” laws, some dating back 

to the 1890s, and originally provided for overtime pay after 8 hours a day on 

federal construction contracts, and provided for overtime pay after 40 hours a 

week. 

CWHSSA Requirements 40 U.S.C. § 3702.

◊ CWHSSA requires overtime pay for laborers and mechanics, including guards 

and watchmen, at a rate of one and one-half times the basic rate of pay for hours 

worked on covered contracts in excess of 40 in a workweek. 

◊ Effective January 1, 1986, the daily (8-hour) overtime requirement was 

eliminated. Therefore, like the FLSA, CWHSSA requires overtime pay after 40 

hours. 

◊ In addition to back wages for unpaid overtime hours, CWHSSA also provides for 

an assessment of liquidated damages at the rate of $10 per day for each day that 

each laborer and mechanic worked without payment of the required overtime 

compensation. 

◊ In those situations where there are concurrent FLSA and CWHSSA violations, 

the back wages are generally computed and reported under CWHSSA rather than 

FLSA. This is because under CWHSSA: 

 ◊◊ The back wages can be withheld to ensure back wage restitution. 

 ◊◊ Liquidated damages may be assessed against the employer. 

 ◊◊ Debarment action may be initiated. 

◊ The safety and health provisions of CWHSSA are within the administrative 

jurisdiction of the Occupational Health and Safety Administration of DOL, rather 

than the WHD. 

CWHSSA Coverage 40 U.S.C. §§ 3701. 

◊ CWHSSA covers most federal contracts which may require or involve the 

employment of laborers or mechanics. In addition to laborers and mechanics 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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covered under DBA/DBRA, CWHSSA also specifically covers guards and 

watchmen. 40 U.S.C. §§ 3701(b)(2). 

◊ CWHSSA applies to DBA, SCA, and DBRA contracts in excess of $100,000. 

◊ CWHSSA applies to contracts in excess of $100,000 — 

 ◊◊ to which the Federal Government or an agency or instrumentality of the 

Government, or a territory of the United States, or the District of 

Columbia is a party; or 

 ◊◊ which is made on behalf of the Government or an Agency or 

instrumentality thereof, or a territory, or the District of Columbia, or 

 ◊◊ which is a contract for work financed at least in part by loans or grants 

from, or loans insured or guaranteed by, the Government or an agency or 

instrumentality under any federal law providing wage standards for the 

work. 

 ◊◊ However, by its terms, CWHSSA does not apply where federal assistance is 

only in the nature of a loan guarantee or insurance. 40 U.S.C. §§ 3701. For 

example, HUD assistance in the form of loan guarantees under the National 

Housing Act is not subject to CWHSSA. 

◊ CWHSSA is self-executing. The failure to include CWHSSA stipulations in a 

contract does not preclude its application. 

◊ CWHSSA has no job site limitation. If an employee performs part of the 

construction work at the job site, part of the work at a shop, and/or travels 

between covered contract work locations, the statute applies to all hours of the 

contract work performed by covered workers. 

CWHSSA Exceptions 40 U.S.C. §§ 3701(b)(3) and 3706 and 29 C.F.R. § 5.15. 

◊ CWHSSA does not apply to contracts for: 

 ◊◊ Transportation by land, air or water. 

 ◊◊ Transmission of intelligence. 

 ◊◊ Purchase of supplies or materials or articles ordinarily available in the open 

market. 

 ◊◊ Work required to be done in accordance with the provisions of the PCA. 

 ◊◊ Construction or services where the contract is not greater than $100,000. 

 ◊◊ Agreements entered into by or on behalf of the Commodity Credit 

Corporation for storage in or handling by commercial warehouse of certain 

items including grains, beans, seeds, cotton, wool and naval stores. 

 ◊◊ Certain sales of surplus power by the Tennessee Valley Authority (TVA). 

 ◊◊ Work performed in a workplace within a foreign country. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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COPELAND “ANTI-KICKBACK” ACT (CA) 

(40 U.S.C. § 3145 and 18 U.S.C. § 874) 

CA Purpose, Requirements, and Coverage 

◊ The CA and implementing regulations in 29 C.F.R. Part 3 apply to DBA and 

DBRA contracts and provide for the following safeguards: 

 ◊◊ Prohibits the “kickbacks” of wages and back wages. 

 ◊◊ Require contractors on covered projects to submit weekly a “Statement of 

Compliance” (i.e. certifying that the contractor has paid the required 

wages). See 29 C.F.R. §3.3 and 3.4, and in the DB contract clauses, 29 

C.F.R. § 5.5(a)(3); FAR at 48 C.F.R. § 52.222-8.) 

 ◊◊ Regulate payroll deductions from wages. 

 ◊◊ Specify methods of payment of wages. 

CA Regulation of payroll deductions

◊ Rules at 29 C.F.R. § 3.5 permit the following deductions from wages without 

DOL approval: 

 (1) Deductions for social security or federal or state income tax 

withholding. 

 (2) Deductions for bona fide prepayment of wages. 

 (3) Deductions for court ordered payments. 

 (4) Deductions for contributions to fringe benefit plans, provided that the 

deduction is not prohibited by law, that it is either voluntarily 

consented to by the employee in writing in advance of the time the 

work is done or provided for in a collective bargaining agreement, 

that no profit or other benefit is obtained by the contractor, and that 

the deduction serves the convenience of the employee. 

 (5) Deductions for purchase of U.S. savings bonds when voluntarily 

authorized by the employee. 

 (6) Deductions to repay loans or to purchase shares in a credit union. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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 (7) Deductions voluntarily authorized for contributions to organizations 

such as the Red Cross, United Way, or similar charitable 

organizations. 

 (8) Deductions to pay regular union initiation fees and membership dues, 

provided that a collective bargaining agreement provides for such 

deductions. 

 (9) Deductions for the “reasonable cost” of board, lodging, or other 

facilities meeting the requirements of section 3(m) of FLSA. 

 (10) Deductions for the cost of safety equipment purchased by the 

employee if such equipment is not required by law to be furnished by 

the employer, if such deduction is not prohibited by FLSA or other 

law, and if the cost on which the deduction is based does not exceed 

the actual cost to the employer. 

◊ Pursuant to 29 C.F.R. § 3.6, any contractor may apply to the DOL for permission 

to make any deductions not listed in 29 C.F.R. § 3.5. DOL may approve 

payroll deductions whenever all of the following conditions are met: 

 (1) The contractor does not make a profit or benefit directly or indirectly 

from the deduction. 

 (2) The deduction is not otherwise prohibited by law. 

 (3) Either the employee voluntarily consented to the deduction in writing 

in advance of the time the DBA/DBRA work is performed or the 

deduction is provided under the terms of a bona fide collective 

bargaining agreement. 

 (4) The deduction serves the convenience and interest of the employee. 

CA “Statement of Compliance”

◊ Contractors and subcontractors on DBA/DBRA-covered construction projects 

must submit a weekly “Statement of Compliance” certifying compliance with the 

DBA/DBRA requirements during the preceding workweek. This “statement of 

compliance” is usually referred to as the certified payroll. 29 C.F.R. Part 3, 29 

C.F.R. § 5.5(a)(3) and FAR 48 C.F.R. § 52.222-8. 

◊ Falsification of a certified payroll is a criminal violation that can result in a fine, 

up to 5 years in prison, or both. 18 U.S.C. § 1001. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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CA “Anti-Kickback” provision 18 U.S.C. § 874. 

◊ The CA provides penalties to preclude a contractor or subcontractor from in any 

way inducing an employee to give up any part of the compensation to which he 

or she is entitled. 

◊ The “anti-kickback” provision of the CA provides that whoever induces any 

person working on a federally funded or assisted construction project to give up 

any part of the compensation to which he/she is entitled is a criminal violation 

punishable by a fine, 5 years in prison, or both. 

 As early as possible, the WHD should be notified of potential criminal violations such 

as the kickback of wages and the falsification of certified payroll records. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

PREVAILING WAGE RESOURCE BOOK 2010 COVERAGE 

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WALSH-HEALEY PUBLIC CONTRACTS ACT (PCA) 

(41 U.S.C. §§ 35-45)

PCA Purpose and Requirements

◊ The PCA provides labor standards for employees working on federal contracts 

over $10,000 for the manufacturing or furnishing of goods, supplies, articles, or 

equipment. 41 C.F.R. Part 50-201.

◊ The PCA requires covered contracts to contain minimum wage, maximum hours, 

and safety and health standards, and prohibits the employment of children under 

16 years of age and convict labor. 41 U.S.C. § 50-201.3. 

◊ The minimum wage requirement under PCA is the FLSA minimum wage and the 

PCA overtime requirements are also the same as the FLSA. 41 C.F.R. §§ 50-

201.102 and 50-202.2. 

◊ The PCA requires the posting of the “Notice to Employees Working on 

Government Contracts” (WH Publication 1313) at the site of the contract work 

and to maintain employment records. 41 C.F.R. §§ 50-201.3(f), 50-201.501 – 50-

201.502. 

◊ The WHD has sole PCA enforcement responsibility, except that the Occupational 

Safety and Health Administration (OSHA) enforces the safety and health 

provisions of the Act. 41 C.F.R. § 50-201.2. 

PCA Coverage

◊ The PCA applies to manufacturing and supply contracts exceeding $10,000 

(including indefinite-delivery contracts, basic ordering agreements, and blanket 

purchase agreements) and to subcontracts under section 8(a) of the Small Business 

Act. 41 C.F.R. § 50-201.1. 

◊ The PCA applies to employees engaged in or connected with the manufacture, 

fabrication, assembling, handling, supervision, or shipment of materials, supplies, 

articles, or equipment required under the contract. 41 C.F.R. § 50-201.101. 

 ◊◊ The PCA does not apply to employees performing only office or custodial 

work; 

 ◊◊ The PCA does not apply to any employee employed in a bona fide executive, 

administrative, professional, or outside salesman capacity, as those terms are 

defined by the FLSA regulations. 29 C.F.R. Part 541. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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◊ The PCA applies to covered contracts or work performed in the 50 States, the 

District of Columbia, Puerto Rico, and the Virgin Islands. 41 C.F.R. § 50-

201.603(b). 

◊ Section 7201(a) of the Federal Acquisition Streamlining Act (FASA) of 1994 

repealed the PCA requirement that every contractor be “a manufacturer of or a 

regular dealer . . . in the performance of the contract,” (41 U.S.C. § 35(a)) . Since 

this amendment became effective on October 1, 1995, PCA includes “a 

manufacturer, regular dealer,” or any supplier/distributor of the materials, supplies, 

articles, or equipment to be manufactured or supplied under the contract as eligible 

contractors. All Agency Memorandum No. 180. 

PCA Statutory exemptions 41 U.S.C. § 43.

◊ Section 9 of the PCA exempts contracts for: 

 ◊◊ Open market purchases or a purchases made without advertising for bids 

under circumstances where immediate delivery is required by the public 

exigency. 41 C.F.R. § 50-201.4(a). 

 ◊◊ Perishables, including dairy, livestock, and nursery products. 41 C.F.R. 

§ 50-201.4(b). 

 ◊◊ Agricultural or farm products processed for first sale by the original 

producers. 41 C.F.R. § 50-201.4(c). 

 ◊◊ Purchase of agricultural commodities or products by the Secretary of 

Agriculture for the. 41 C.F.R. § 50-201.4(d). 

 ◊◊ Common carrier carriage of freight or personnel by vessel, airplane, bus, 

truck, express, or railway line, where published tariff rates are in effect. 

 41 C.F.R. § 50-201.4(e). 

 ◊◊ Furnishing of service by radio, telephone, telegraph, or cable companies, 

subject to the Federal Communications Act of 1934 (48 Stat. 1064 as 

amended; 47 U.S.C. Chapter 5). 41 C.F.R. § 50-201.4(f). 

PCA Administrative Exemptions 

◊ The following contracts have been exempted from the PCA pursuant to the 

procedures required under section 6 of PCA. 41 C.F.R.§§ 50-201.601 – 50-

201.603. 

 ◊◊ Contracts for public utility services including electric light and power, 

water, steam, and gas. 41 C.F.R. § 50-201.603(a). 
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 ◊◊ Contracts for materials, supplies, articles, or equipment no part of which 

will be manufactured or furnished within the geographic limits of PCA. 

41 C.F.R. § 50-201.603(b). 

 ◊◊ Contracts covering purchases against the account of a defaulting contractor 

where the PCA stipulations were not included in the defaulted contract. 

41 C.F.R. § 50-201.603(c). 

 ◊◊ Contracts awarded to sales’ agents or publisher representatives, for the 

delivery of newspapers, magazines or periodicals by the publishers thereof. 

41 C.F.R 41 § 50-201.603(d). 
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THE MCNAMARA-O'HARA SERVICE 

 CONTRACT ACT (SCA) 

(41 U.S.C. §§ 351-358)

SCA Legislative History and Purpose

◊ The SCA became effective in January 1966. The law was amended in 1972 

and 1976. It is the most recent of the government contract labor standards laws 

administered by the WHD. 

◊ The SCA was enacted to, in effect,” close the gap” in labor standards protection 

between supply contracts subject to the PCA and construction contracts subject to 

DBA. (Services were the only remaining category of federal procurement not 

covered by labor standards law.) 

◊ The SCA was intended to remove wages as a factor in the competition for federal 

service contracts by requiring the payment of not less than the locally prevailing 

wage rates (apart from the FLSA minimum wage) and fringe benefits, or in 

certain cases, the wage rates and fringe benefits contained in a predecessor 

contractor's collective bargaining agreement (section 4(c) of the Act). (Labor 

costs are often the predominant factor affecting bids on federal service contracts 

being awarded to the lowest bidder.) 

SCA Requirements

◊ The SCA applies to most contracts entered into by the United States or the 

District of Columbia that are principally for the furnishing of services through the 

use of service employees. 

◊ The major SCA labor standards provisions are: 

 ◊◊ Prevailing minimum wage and fringe benefit compensation standards for 

service employees working on contracts over $2,500, and FLSA minimum 

wages for contracts of $2,500 or less. 

 ◊◊ Recordkeeping and posting requirements. 

 ◊◊ Safety and health protection. 

◊ WHD has sole SCA enforcement responsibility of the wage and fringe benefit 

requirements of SCA, while the Occupational Safety and Health Administration 

(OSHA) enforces the safety and health provisions of the SCA. 
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SCA Coverage 29 C.F.R. §§ 4.107 – 4.113. 

What federal government contracts are subject to SCA?

 ◊ Contracts entered into by any agency or instrumentality of the federal 

government, whether by the executive, judicial, or legislative branches, or 

by the District of Columbia. Examples: the Department of Defense, the 

Department of the Interior’s General Services Administration, etc. 

 ◊ Contracts issued by wholly owned corporations of the government. 

Examples: Tennessee Valley Authority, Postal Service. 

 ◊ Contracts with non-appropriated fund activities, i.e., concession contracts. 

Examples: military post exchanges (PX's), cafeteria boards in federal 

buildings. 

 ◊ Contracts between a federal agency and a state or local government are

covered. Contracts between federal agencies are not covered (examples: 

DOL and the General Services Administration). 

 ◊ SCA applies only to federal contracts, not to federally “assisted” contracts. 

Three elements necessary for coverage: 

 1. The contract is principally (i.e., primarily) for services (as distinguished 

from construction or manufacturing or some other purpose). 

 2. The contract involves work to be performed within the United States as 

defined in section 8(d) of the SCA. 

 The SCA applies to service contracts performed in any of the 

50 States, the District of Columbia, Puerto Rico, the Virgin Islands, 

Outer Continental Shelf lands, American Samoa, Guam, Wake 

Island, Johnston Island, and the Northern Marianas. (Canton Island, 

Eniwetok Atoll, and Kwajalein Atoll are now independent and no 

longer a part of the U.S. even though still listed in the statute.) 

 Contracts that are performed entirely outside the U.S. are not covered. 

For example, a weather service contract performed on a vessel 

operating exclusively in international or foreign waters. 
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 3. The contract is performed through the use of service employees as defined 

in section 8(b) of the SCA regardless of any contractual relationship that 

may be alleged to exist between a contractor and an employee. 

 Section 8(b) of the Act defines “service employee” as any person 

engaged in the performance of a covered contract except those 

persons who individually qualify for exemption as bona fide 

executive, administrative or professionals employees as defined in 

29 C.F.R. § Part 541. 29 C.F.R. § 4.113(b); 29 C.F.R. § 4.156. 

 Coverage of service employees depends on whether they perform 

the work called for by an SCA-covered contract. 29 C.F.R. 

§ 4.155. 

 ◊ Examples of contracts covered by SCA. 29 C.F.R. § 4.130. 

 ◊◊ Security and guard services 

 ◊◊ Janitorial services 

 ◊◊ Cafeteria and food service 

 ◊◊ Grounds maintenance 

 ◊◊ Laundry and dry cleaning 

 ◊◊ Data processing 

 ◊◊ Electronic equipment maintenance and operation 

 ◊◊ Chemical testing and analysis 

 ◊◊ Support services at government installations 

 ◊◊ Drafting and illustrating, mapping and charting services 

 ◊◊ Operating and maintenance of government bases 

 ◊◊ Warehousing 

 ◊ Examples of contracts not covered by SCA. 29 C.F.R. § 4.134. 

 ◊◊ Any contract whose principal purpose is something other than the 

procuring of services through the use of service employees – for 

example, a construction, supply or manufacturing contract. 

 ◊◊ Contracts for the leasing of space. 

 ◊◊ Contracts for professional medical services (where the employment of 

“service employees” is not involved or is a minor factor). 

 ◊◊ Contracts to operate or manage an entire federal facility or program 

(i.e., government-owned contractor/privately-operated “GOCO” or 

“GOPO”). 
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 Sometimes contracts are entered into with a prime contractor to 

operate a federal facility or program for and on behalf of the 

government. Because the contractor is in effect operating in the place 

of the government as an “agent for the government,” such a contract 

is not considered subject to the SCA. However, contracts entered into 

by the operating contractor with secondary contractors, for and on 

behalf of the government, that have services as their principal purpose 

are subject to SCA. 29 C.F.R. § 4.107(a). 

SCA Statutory Exemptions SCA § 7; 29 C.F.R. §§ 4.115 – 4.122. 

 The SCA does not apply to the following: 

 ◊ Any contracts of the United States for construction, alteration, and/or repair, 

including painting and decorating, of public buildings or public works 

(contracts subject to DBA). 29 C.F.R. § 4.116. 

 ◊ Any work (work not contract) required to be done in accordance with 

provisions of the PCA. 29 C.F.R. § 4.117. 

 ◊ Any contract for the carriage of freight or personnel by vessel, airplane, 

bus, truck, express, railway line, or oil or gas pipeline where published 

tariff rates are in effect (29 C.F.R. § 4.118). The effect of this exemption 

has become limited in scope due to changes in transportation laws. (See All 

Agency Memorandum No. 185 for further information.) 

 ◊◊ This exemption applies only to contracts for carriage by a common 

carrier. A transportation service contract is exempt only if the service 

is actually governed by published tariff rates in effect pursuant to 

state or federal law. A contract between the government and the 

carrier would be evidenced by a government bill of lading citing the 

published tariff rates. 

 ◊◊ Contracts for ambulance or taxicab services are typically not exempt 

because they are usually not deemed common carriers and/or the 

transportation is not governed by published tariff rates. 

 ◊◊ Mail haul contractors are not within the scope of this exemption 

because “mail” is not considered to be “freight” under federal law. 

(However, see the discussion of relevant regulatory exemptions, 

below.) 

 ◊◊ Contracts principally for packing, crating and warehousing of 

household goods are also not exempt, even though performed by an 

otherwise common carrier, because the local hauling is a minor, 

incidental purpose of the contract. 
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 ◊ Any contract for the furnishing of services by radio, telephone, telegraph, or 

cable companies, subject to the Communications Act of 1934. 29 C.F.R. 

§ 4.119. 

 ◊ Any contract for public utility services, including electric light and power, 

water, steam, and gas. 29 C.F.R. § 4.120. 

 ◊ Any employment contract providing for direct service to a federal agency 

by an individual or individuals. 29 C.F.R. § 4.121. 

 ◊ Any contract with the U.S. Postal Service, the principal purpose of which is 

the operation of postal contract stations. 29 C.F.R. § 4.122. 

SCA Regulatory Exemptions SCA § 4(b); 29 C.F.R. § 4.123. 

◊ The SCA authorizes DOL to provide reasonable limitations, variations, tolerances 

and exemptions from provisions of SCA. but only in special circumstances where 

it is found that such action is necessary and proper in the public interest or to 

avoid serious impairment to the conduct of government business and is in accord 

with the remedial purpose to protect prevailing labor standards. 
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INTERACTION AMONG THE GOVERNMENT CONTRACTS 

LABOR STANDARDS STATUTES 

Standard Contract Clauses

◊ DBA/DBRA 29 C.F.R. § .5.5(a) FAR: 48 C.F.R. §§ 52.222-5 

 through 52.222-15. 

◊ SCA 29 C.F.R. § 4.6. FAR: 48 C.F.R. §§ 52.222.41 

 through 52.222-44, 52.222-48 

 and 52.222-49. 

◊ PCA 41 C.F.R. § 50-201.3 FAR: 48 C.F.R. §§ 52.222-20. 

◊ CWHSSA 29 C.F.R. § 5.5(b) FAR: 48 C.F.R. §§ 52.222-4. 

Contracts Requiring PCA and DBA

◊ If a PCA-covered contract involves more than an incidental amount of 

construction work, it is also subject to the DBA. For example: 

◊ Contract for the supply of a security system that requires: 

 ◊◊ Replacement of existing conduit, 

 ◊◊ Laying cable, and 

  ◊◊ Tearing out and replacing walls. 

◊ Contract for the supply and installation of modular furniture or energy-efficient 

lighting fixtures that requires: 

  ◊◊ Bolting furniture or fixtures to floors, walls and/or ceilings, 

 ◊◊ Modifying walls, floors and/or ceilings to accommodate shelving, 

 ◊◊ Installing electrical connections for desk area outlets, or 

 ◊◊ Installing new ballasts and/or lighting fixtures. 

Contracts Requiring SCA and DBA

◊ SCA contracts principally for services which contain specific requirements for 

substantial amounts of construction, reconstruction, alteration, or repair work 

physically or functionally separate from the other work called for by the contract, 

are also subject to the DBA. 
U.S. DEPARTMENT OF LABOR LABOR STANDARDS 

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◊ DBA would apply to a contract that is principally for services, but also involves 

construction work. DBA would apply to an SCA contract, which is principally 

for services if a substantial amount of construction work is also necessary for 

performance of the contract and the construction work is physically or 

functionally segregable from the other contract work. 29 C.F.R. § 4.116(c)(2); 

FAR 48 C.F.R. § 22.402(b). 

 ◊◊ Substantial relates to the type and quantity of construction work to be 

performed; not merely its value, in dollars or cost percentages, compared to 

the total contract value, and 

 ◊◊ Segregable means that as a practical matter the construction work is 

functionally separate from, and is capable of being performed on a 

segregated basis from the other work called for by the contract. 29 C.F.R. 

§ 4.116(c)(2); FAR 48 C.F.R. § 22.402(b). 

◊ Examples:

 ◊◊ Contract for furnishing cafeteria and food services that includes 

requirements to renovate and paint the cafeteria and kitchen. While this is 

an SCA contract, the construction specifications of the contract are DBAcovered. 

 ◊◊ Base maintenance and support contract that provides services for operation 

of a military base and requires substantial and segregable construction work 

orders such as: 

 ◊◊◊ Painting base housing and buildings. 

 ◊◊◊ Refinishing floors. 

 ◊◊◊ Reroofing buildings. 

◊ Questions sometimes arise as to whether the work required under an individual 

work order, task order or service call is for SCA maintenance or DBA 

painting/repairs. 

 ◊◊ Defense Federal Acquisition Regulation Supplement guidance regarding 

installation support contracts advises that where the distinction is unclear: 

 ◊◊◊ Individual service calls or orders which will require a total of 32 or 

more work-hours to perform shall be considered to be repair work 

subject to the DBA. 48 C.F.R. 222.402-70(d)(1). 

 ◊◊◊ Painting work of 200 square feet or more to be performed under an 

individual service call or order shall be considered to be subject to the 
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DBA regardless of the total work-hours required. 48 C.F.R. 222.402-

70(d)(2). 

 ◊◊◊ Also, contracting officers may not avoid application of the DBA by 

splitting individual tasks between orders or contracts. 48 C.F.R. 

222.402-70(f). 

 ◊◊ “Painting and decorating” are explicitly included in DBA coverage by the 

language of the Act, specifically that refers to its applicability to contracts “for 

construction, alteration, or repair, including painting and decorating, of 

public buildings and public works.” 

Distinguishing between PCA and SCA

◊ A federal contract exclusively for services is not covered by the PCA. It is covered 

by the SCA. 29 C.F.R. § 4.117.

◊ A federal contract in excess of $10,000 for the manufacture or furnishing of 

materials, supplies, articles, or equipment is covered by the PCA. Contracts that 

require services that are incidental to or are an integral part of the contract 

requirements for the manufacture or furnishing of materials, supplies, articles, or 

equipment, are not covered by the SCA. 41 C.F.R. § 50-201.1. 

◊ A federal contract exceeding $10,000 that is principally for services and also 

contains a significant manufacture or supply requirement has coverage under 

 ◊◊ SCA for the services performed under the contract, and 

 ◊◊ PCA for the work connected with the manufacture, fabrication, 

assembling, handling, supervision, or shipment under the contract. 

 29 C.F.R. § 4.117(a). 

◊ PCA applies to contracts principally for re-manufacturing of equipment that is so 

extensive as to be equivalent to manufacturing. 29 C.F.R. §§ 4.117(b)(1)-(2). 

 ◊◊ The work, which must be performed in a facility owned or operated by the 

contractor, includes: 

 ◊◊◊ Major overhaul of an item, equipment, or material which is degraded 

or inoperable that is restored to its original life expectancy or nearly 

so. Manufacturing processes similar to those used in the 

manufacturing of the item or equipment are utilized; or, 

 ◊◊◊ Major modification of an item, equipment, or material, which is 

wholly or partially obsolete, that is rebuilt or reassembled. The 
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contract work results in a substantially modified item in a usable and 

serviceable condition. 

◊ In contrast, SCA covers contracts for periodic and routine maintenance, 

preservation, care, adjustment, upkeep, or servicing of equipment to keep it in 

usable, serviceable, working order. 29 C.F.R. § 4.117(b)(3): 

 ◊◊ Contracts that typically are billed on an hourly rate – labor plus materials 

and parts – basis. 

 ◊◊ Contracts to repair motorized vehicles, or appliances; to inspect, test, 

calibrate, lubricate, tune-up, or replace internal parts of equipment; and to 

reupholster, recondition, repair, and refinish furniture. 

Distinguishing between SCA and DBA

◊ An important coverage concern is distinguishing DBA and SCA work under 

federal contracts. This is particularly important because many federal agency 

procurement officials are responsible, in the first instance, to designate 

application of DBA and SCA requirements to different work under single 

contracts. 

 ◊◊ Routine and recurring maintenance work is covered by SCA and typically 

involves the activity of keeping something in such a condition that it may 

be continuously utilized. 

 ◊◊ By contrast, DBA typically covers activities such as rehabilitation or 

restoration of a facility.. 

 ◊◊ Other factors considered in interpreting the application of the statutes are: 

 ◊◊◊ whether the activity is continuous in nature as opposed to a single 

incident repair or replacement job. 

 ◊◊◊ how much time is necessary to complete the task, i.e., is the activity 

accomplished in an hour or two hours of work versus days, weeks or 

months for repair of a particular building component. 

◊ SCA covered maintenance work vs. DBA repair work: 

 ◊◊ SCA covered maintenance work – Work is typically scheduled, routine, and 

recurring. The workers are typically engaged in performing ongoing, 

activities needed to keeping something in such a condition that it may be 

continuously utilized – 

 ◊◊◊ Activity is continuous in nature; 
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 ◊◊◊ Activity may include touch-up painting less than 200 square 

feet; 

 ◊◊◊ Activity generally accomplished within 32 hours. 

 ◊◊ DBA repair work – Typically covers activities such as the restoration of a 

facility by replacement, overhaul, or reprocessing of constituent parts or 

materials. 

 ◊◊◊ Activity is a one-time fix to something not functioning; 

 ◊◊◊ Activity generally takes more than 32 hours for repair of a 

particular building component; 

 ◊◊◊ Activity involves the alteration, relocation, or rearrangement of 

architectural and structural components of a facility that affect 

the structural strength, stability, safety, capacity, efficiency, or 

usefulness of the facility. Off-site alterations of non-fixed 

components that are not an integral part of the building or work 

are likely to be SCA-covered activities. 

◊ An important factor in determining coverage is whether the activity is undertaken 

as part of a construction project. For example: 

 ◊◊ DBA applies when janitorial, cleanup, landscaping, carpet laying, and 

drapery installation activities are undertaken as an integral part of or in 

conjunction with new construction, such as under a construction contract 

where they precede and are conditional to acceptance of a building or 

public work by the owner. 

 ◊◊ If performed after construction contractor and subcontractors have finished, 

left the site, and the contracting agency has accepted the building, the work 

would be SCA. 

 ◊◊ SCA applies when the same activities are scheduled as part of routine 

maintenance and upkeep, such as replacing worn-out carpeting in a public 

building, daily janitorial work, weekly mowing of grass, etc. 

◊ Demolition work 29 C.F.R. § 4.116(b): 

 ◊◊ SCA applies where contract for the demolition or dismantling of buildings 

or other structures, and does not contemplate further construction activity at 

the site; or 

 ◊◊ DBA applies where contract for clearing of the site is to be followed by the 

construction of a public building or public work at the same location 
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 ◊◊ All Agency Memorandum No. 190 provides a discussion of the application 

of these labor standards to demolition contracts. 

◊ Exploratory drilling and well drilling: 

 ◊◊ SCA applies when the drilling is for a purpose other than part of 

construction, such as exploratory drilling to obtain data to be used in 

engineering studies. 29 C.F.R. § 4.130(a)(16); 

 ◊◊ SCA may apply to a federal contract for drilling for to obtain data to be 

used in planning of a construction project that has not been authorized or 

for which no funds have been appropriated. 

 ◊◊ DBA applies to drilling holes for water wells, oil wells, or other structures 

and improvements that fall within the term “work” as defined by 29 C.F.R. 

§ 5.2(i). 

◊ On DBRA projects, these considerations do not apply, as there is no SCA 

coverage with respect to such contracts. 
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DISPUTES CONCERNING COVERAGE DETERMINATIONS 

◊ The contracting agencies have the initial responsibility for determining which 

labor standards statutes apply to particular contracts. 

◊ WHD provides compliance assistance regarding appropriate application of 

prevailing wage statutes.

◊ DOL has the authority for issuing final determinations on coverage. Each final 

ruling is based on the facts of a specific situation and how those facts relate to the 

coverage principles set forth by regulation, statute, and pertinent case law. 

◊ In making coverage determinations, WHD generally solicits input from the 

affected parties. 

◊ Final WHD rulings may be appealed to the ARB (ARB) under 29 C.F.R. § 7 

regarding DBA and DBRA cases, and 29 C.F.R. § 8 regarding SCA cases. On 

April 17, 1996, the ARB was established, to it were transferred the authorities 

and responsibilities previously delegated by the Secretary of Labor to the Wage 

Appeals Board (WAB) and the Board of Service Contract Appeals, and the latter 

Boards were eliminated. (See 61 FR 19982). 

◊ The members of the ARB are appointed by the Secretary of Labor to review final 

rulings and interpretations on wage determinations, coverage, and enforcement 

issues under the DBRA and SCA. The Board has the full authority of the 

Secretary of Labor in such matters.