Overview
FAR Part 22 prescribes the policies and procedures for applying labor laws to federal acquisitions, ensuring that the government remains a neutral party in labor-management disputes while enforcing statutory requirements. It covers a wide spectrum of social and economic mandates, including minimum wages, overtime standards, equal employment opportunity, and the prohibition of forced labor.
Key Rules
- Government Impartiality: Agencies must remain neutral in labor disputes and cannot undertake conciliation or arbitration; contractors are held accountable for "reasonably avoidable" delays caused by strikes.
- Overtime Policy: Contractors are required to perform contracts without the use of overtime whenever possible. Overtime in cost-reimbursement contracts requires written approval from an agency official based on essential delivery needs.
- Wage Determinations: For construction (Davis-Bacon) and service (Service Contract Act) contracts, the government must provide specific Department of Labor (DOL) wage determinations that mandate minimum pay and fringe benefits.
- Convict Labor: The use of convict labor is generally prohibited for contracts above the micro-purchase threshold, except for specific federally certified work-release programs.
- Nondiscrimination & Affirmative Action: Contractors must comply with strict Equal Employment Opportunity (EEO) requirements, including affirmative action programs for veterans and workers with disabilities.
- Prohibition of Forced Labor: There is a zero-tolerance policy regarding human trafficking and the acquisition of products produced by forced child labor.
- Employment Eligibility: Most federal contractors are required to use the E-Verify system to confirm the legal status of their employees.
Responsibilities
- Contracting Officers (COs): Responsible for incorporating correct labor clauses, obtaining wage determinations via SAM.gov or "e98," approving overtime premiums, and ensuring contractor compliance with EEO and labor standards.
- Contract Administration Office: Tasked with reporting potential labor disputes that may interfere with performance and conducting compliance checks (e.g., payroll reviews in construction).
- Contractors: Must report labor disputes to the CO, maintain accurate payroll records, post required labor posters, flow down labor clauses to subcontractors, and verify employment eligibility.
- Department of Labor (DOL): Acts as the primary authority for administering and enforcing wage and hour laws, investigating violations, and issuing wage determinations.
Practical Implications
- Administrative Burden: Contractors face significant record-keeping requirements, particularly under construction and service contracts, where weekly certified payrolls or seniority lists may be required.
- Pricing Risks: Failure to properly account for the Service Contract Act (SCA) or Davis-Bacon Act wage increases can lead to significant cost overruns, though FAR provides mechanisms for price adjustments when wage determinations are updated.
- Performance Delays: While a strike may be an "excusable delay," a contractor must prove they took all reasonable steps to prevent or end the work stoppage (such as filing NLRB charges) to avoid being placed in default.
- Subcontractor Oversight: Prime contractors are legally responsible for the labor law compliance of their subcontractors; a violation by a sub can lead to the Prime's payments being withheld or the contract being terminated.