Overview
FAR 22.1903 defines the scope and jurisdiction of the minimum wage requirements for federal contractors, specifying the types of contracts, geographic locations, and categories of workers subject to these regulations. It establishes that the mandate primarily follows contracts governed by the Service Contract Labor Standards and Wage Rate Requirements (Construction) statutes.
Key Rules
- Contractual Scope: The subpart applies to contracts covered by the Service Contract Labor Standards statute (formerly Service Contract Act) and the Wage Rate Requirements (Construction) statute (formerly Davis-Bacon Act).
- Geographic Boundaries: Coverage is limited to work performed within the United States, including all 50 states, D.C., and specific territories such as Puerto Rico, Guam, and the U.S. Virgin Islands. For contracts performed both domestically and abroad, the rules apply only to the domestic portion.
- Broad Definition of "Worker": Coverage applies regardless of the alleged contractual relationship (e.g., independent contractor vs. employee) and specifically includes workers with disabilities and registered apprentices.
- The "20 Percent Rule": Individuals performing "in connection with" a contract (performing necessary duties but not the specific work called for by the contract) are exempt if they spend less than 20% of their hours in a given workweek on that contract.
- Specific Exemptions: The subpart does not apply to "white collar" employees (executive, administrative, or professional capacities) or certain learners and students, provided they are not otherwise covered by the Service Contract or Davis-Bacon statutes.
Practical Implications
- Labor Segregation: Contractors performing international work must strictly bifurcate their payroll and performance tracking to ensure minimum wage compliance for the U.S.-based portion of the contract while identifying exempt foreign performance.
- Threshold Monitoring: Prime and subcontractors must implement precise timekeeping systems for "indirect" support staff to determine if their involvement crosses the 20% weekly threshold, which would trigger mandatory minimum wage adjustments for those individuals.