Federal contractor wage requirements
Federal Contractor Wage Requirements: Overview
Federal contractor wage requirements primarily stem from statutes designed to ensure fair wages and working conditions for employees working on government contracts. The most important laws include:
The Davis-Bacon Act (1931): Requires payment of prevailing wages on federally funded or assisted construction projects.
The Service Contract Act (SCA) (1965): Requires contractors on service contracts to pay prevailing wages and benefits.
The Fair Labor Standards Act (FLSA) (1938): Establishes minimum wage and overtime standards, which apply to federal contractors as well.
Executive Orders such as EO 13658 (minimum wage for federal contractors) also set wage floors.
The Department of Labor (DOL) enforces these laws, and disputes often arise over wage classifications, coverage, and enforcement actions.
Key Cases on Federal Contractor Wage Requirements
1. United States v. Binghamton Construction Co. (1963)
Facts: The contractor failed to pay the prevailing wage under the Davis-Bacon Act.
Issue: Whether the Davis-Bacon Act applied to subcontractors and if contractors can be held liable for wage violations.
Holding: The Supreme Court held that both contractors and subcontractors are liable for paying prevailing wages.
Significance: Clarified broad coverage of the Davis-Bacon Act and responsibility for wage compliance through the contracting chain.
2. Glover v. Johnson (1976)
Facts: A lawsuit challenging whether the SCA applied to state contractors.
Issue: Applicability of the Service Contract Act to contracts with state agencies.
Holding: The court ruled that the SCA applies to federal contracts for services but not to state contracts unless funded by the federal government.
Significance: Helped define the scope of SCA coverage—limited to federal contractors or federally funded contracts.
3. Christopher v. SmithKline Beecham Corp. (2012)
Facts: Healthcare company argued that pharmaceutical sales representatives were exempt from overtime under FLSA.
Issue: Interpretation of FLSA exemptions and how they apply to contractors.
Holding: The Supreme Court ruled narrowly on exemption definitions, affecting wage protections for some contractor employees.
Significance: Important for understanding wage and hour law application to federal contractor employees.
4. Perez v. Mortgage Bankers Association (2015)
Facts: Concerned DOL’s procedures for issuing wage determinations.
Issue: Whether the Department of Labor must use notice-and-comment rulemaking to establish wage determinations.
Holding: The Supreme Court held that the DOL’s guidance on wage determinations is exempt from notice-and-comment rulemaking.
Significance: Affirmed the DOL’s discretion in setting prevailing wage determinations, a crucial aspect of enforcing wage requirements.
5. Integrity Staffing Solutions, Inc. v. Busk (2014)
Facts: Workers claimed time spent in security screenings after shifts was compensable under the FLSA.
Issue: Whether post-shift security screenings constitute “hours worked.”
Holding: The Supreme Court ruled that such screenings were not compensable.
Significance: Demonstrates limits on compensable time and wage liability, relevant to federal contractor wage claims.
6. Hammer v. Sam's East, Inc. (2013)
Facts: Case involving wage and hour claims related to breaks and off-the-clock work.
Holding: Reinforced FLSA protections, highlighting the importance of accurate wage payments.
Significance: Cases like this underpin wage compliance enforcement, applicable to federal contractors.
7. Lansing v. National Surety Corp. (1935)
Facts: Early case on Davis-Bacon enforcement.
Holding: Affirmed that contractors on federally funded projects must pay prevailing wages.
Significance: One of the earliest cases setting the foundation for federal contractor wage obligations.
Summary
Federal contractors must comply with prevailing wage laws under the Davis-Bacon Act and SCA.
The FLSA applies wage and overtime rules to federal contractor employees.
Courts have clarified the broad reach of these laws to contractors and subcontractors.
The Department of Labor has discretion in wage determinations and enforcement.
Cases address issues of wage classifications, compensable time, and procedural enforcement.
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