1. LABOR LAWS AND AFFIRMATIVE
ACTION CONSIDERATIONS IN
FEDERAL CONTRACTS
NCMBC FEDCON SUMMIT
Wilmington, NC
October 16-17, 2013
Rolly Chambers
Smith, Currie & Hancock LLP
Charlotte, NC
RLChambers@smithcurrie.com
704-334-3459

2. Labor Laws and Federal Contracts
Overview
ž Federal
government implements
socioeconomic policies through its contracts
ž Cost
of doing federal business = following
government contracting policies
ž Build
in admin overhead expenses

3. Labor Laws and Federal Contracts
Overview
ž Legal
sources – statutes, regulations, orders
ž Statutes – U.S. Code (U.S.C.)
— Legislation enacted by Congress
ž Regulations – rules adopted by agencies
— Code of Federal Regulations (CFR)
— Federal Acquisition Regulations (FAR)
ž Executive
orders – order issued by president

4. Labor Laws and Federal Contracts
Federal Prevailing Wage Policies
ž Davis-Bacon Act:
40 U.S.C. § 3141, et seq.
— Federal construction contracts where total value
is $2000 or more
— Payment of “prevailing wages” to workers on
federal construction projects
○ Wage Determinations set prevailing wages
○ Each contract includes a wage determination
○ Set by geographic area and job classification

5. Labor Laws and Federal Contracts
Federal Prevailing Wage Policies
ž Davis-Bacon Act:
40 U.S.C. § 3141, et seq.
— Flow down - Subs must pay workers the wage in
the Wage Determination
— Certified payrolls
— Enforcement penalties
○ Contract termination and debarment
○ Liability for unpaid wages and liquidated damages
○ Fines/imprisonment for false certified payrolls

6. Labor Laws and Federal Contracts
Federal Prevailing Wage Policies
ž Contract
Work Hours and Safety Standards
Act: 40 U.S.C. § 3701, et seq.
— Applies to all federal contracts employing laborers
or mechanics on public works
— Provides for overtime pay
○ 1.5 x wage rate for hours worked above 40 hr./week
— Flow down – applies to subs
— Enforcement penalties
○ Withholding to pay required overtime
○ LD’s - $10 per day per worker for overtime not paid

7. Labor Laws and Federal Contracts
Federal Prevailing Wage Policies
ž
Walsh-Healey Public Contracts Act: 41 U.S.C.
§6501, et seq.
— Applies to contracts for manufacture or furnishing of
materials, supplies, equipment, etc. > $10,000
— Workers paid prevailing wage
○ Set by Wage Determination
— No child labor or prison labor
— Poster display
— Enforcement penalties
○ LD’s - $10 per day per worker for overtime not paid
○ Potential Imprisonment

8. Labor Laws and Federal Contracts
Federal Prevailing Wage Policies
ž Service
seq.
Contract Act: 41 U.S.C. § 351, et
— Applies to service contracts
— Construction and professional services contracts
exempt
— Workers paid prevailing wage and benefits
○ DOL makes Wage Determination
— Enforcement penalties
○ Liability for underpayments
○ Contract termination; debarment

9. Labor Laws and Federal Contracts
Federal Prevailing Wage Policies
ž Dept.
of Labor resources
— http://www.dol.gov/compliance/index.htm -
Help Navigating DOL Laws and Regulations;
and
— http://www.dol.gov/compliance/guide/
index.htm - Employment Law Guide: Laws,
Regulations, and Technical Assistance
Services.

10. Labor Laws and Federal Contracts
Risks of Non-Compliance
ž Summary
— Non-compliance has a high price
— Penalties are severe
○ Withholding of contract funds
○ Suspension
○ False Claims Act liability – treble damages
○ Possible Fines and Imprisonment
— Compliance is the right way to go

11. Labor Laws and Federal Contracts
Thanks
Rolly Chambers
Smith, Currie & Hancock LLP
5701 Westpark Dr., Suite 204
Charlotte, NC 28217
rlchambers@smithcurrie.com
704-334-3459