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  2. Labor Laws

Labor Laws


Alternate Definition

Labor laws offer legal protections to workers under federal contracts. The U.S. Department of Labor administers the regulations that stem from these labor laws and statutes, which cover the following areas:

  1. Wages and hours worked
  2. Safety and health standards
  3. Health benefits, retirement standards, and workers compensation
  4. Other workplace standards
  5. Work authorization for non-U.S. citizens
  6. Federal contracts: Working Conditions
  7. Federal contracts: Equal opportunity in employment
General Information



There is a long history of labor-management relations in the United States. During the Great Depression of the 1930s there was a move to change the way workers were treated, including changes in organizing labor unions. Due to the large number of unemployed workers and the view that those workers could be taken advantage of, the Government stepped in to provide worker protection laws. Most of the current labor laws were enacted during the 1930s, but as the nation moved forward and other areas of concern were raised, additional labor laws were enacted. These changes provided specific protections under the law such as nondiscrimination due to age, race, and religion, and prohibited child labor and trafficking in persons. 1


Federal government contracts include clauses that provide coverage in accordance with the labor laws. A key to understanding the guidance in part 22 of the Federal Acquisition Regulation is to remember that labor laws were passed at different times to address specific problem areas in the relationship between labor and management. For example, the Davis-Bacon Act (now called the Construction Wage Rate Requirements statute) was passed to ensure wages were not the basis for lower bids in attempt to win construction contract awards. It required a minimum wage for workers under these contracts, to be established by the Department of Labor (DOL). The Construction Wage Rate Requirements statute allows for firms to bid employee wage rates higher than DOL standard rates, but they cannot offer lower.


Key Legislation


Key Acts that impact wages for Federal contracts are:


  1. 41 U.S.C. chapter 65, Contracts for Materials, Supplies, Articles, and Equipment Exceeding $15,000 (formerly Walsh-Healy Public Contracts Act) – Applies to supply and equipment contracts over $15,000. Requires the federal minimum wage for all employees and time-and-a-half the regular rate of pay for all hours worked beyond 40 per week.
  2. Service Contract Labor Standards statute (formerly Service Contract Act of 1965) – Implements a prevailing wage (determined by DOL) for service contracts over $2,500.
  3. Construction Wage Rate Requirements statute (formerly Davis-Bacon) and related Acts – Implement a prevailing wage (determined by DOL) for construction contracts over $2,000.
  4. Kickbacks statute (formerly Anti-Kickback Act) – Prohibits federal contractors or subcontractors engaged in building construction or repair from inducing an employee to give up any part of the compensation to which he or she is entitled under his or her employment contract. Workers cannot be made to “pay” for the privilege to work.


These Acts require contracting officers in the Federal government to include a Department of Labor wage determination in contracts and ensure that government contractors are paying the prevailing wage rate (or higher) to their workers. In addition to the Acts that impact wages, other Acts and Executive Orders allow for affirmative action for certain groups of workers and prohibit discrimination.


1Trafficking includes involuntary servitude and debt bondage