FAR 22.103—Overtime.

Definition.

FAR 22.103-1 defines the term “normal workweek” for purposes of Subpart 22.1, which governs labor standards and related wage determinations in federal contracting. The section establishes the general rule that a normal workweek is 40 hours, and it also creates a limited exception for work performed outside the United States and its outlying areas where a longer workweek may be treated as normal. That exception applies only when the longer schedule matches the local norm as determined by custom, tradition, or law, and only when hours over 40 are not paid at a premium rate. In practice, this definition matters because it affects how contractors structure schedules, calculate labor costs, and determine whether overtime or premium pay assumptions are appropriate under the applicable labor standards. It also helps contracting officers and contractors avoid importing U.S.-based assumptions about a 40-hour week into overseas performance locations where local labor practices may differ.

Policy.

FAR 22.103-2 states the Government’s policy on overtime use in contract performance. It covers the general preference for performing contracts without overtime, the special concern about overtime as a regular employment practice, and the two main exceptions: when overtime will produce lower overall cost to the Government or when overtime is needed to meet urgent program needs. It also addresses approved overtime, extra-pay shifts, and multishift operations, directing that these be scheduled in a way that supports the policy objectives. In practice, this section is a cost-and-management control rule: contracting officers and contractors should treat overtime as the exception, not the norm, and should be able to justify it based on cost savings or mission urgency. The section matters because overtime can increase labor costs, affect productivity and quality, and create labor-management or schedule risks if used routinely without a sound rationale.

Procedures.

FAR 22.103-3 explains the procedures contracting officers must follow to avoid unnecessary Government payment of overtime premiums and to control when overtime is included in contract pricing. It covers three main topics: how solicitations should be written so they do not invite overtime at Government expense, how contracting officers should negotiate prices or estimated costs without overtime and shift premiums when possible, and what to do when overtime will actually be needed during performance. The section is designed to protect the Government from paying premium labor costs unless those costs are truly necessary for the work and cannot reasonably be avoided through scheduling, sourcing, or negotiation. In practice, this means the contracting officer must think ahead about delivery and performance schedules, ask offerors whether their pricing includes overtime or shift differentials, and, if overtime is expected, obtain a contractor request that identifies the overtime needed over the life of the contract. The contractor’s request must include the information required by the Payment for Overtime Premiums clause, which gives the Government a basis to evaluate and control those costs. This section is especially important in negotiated procurements where labor timing, staffing patterns, and production schedules can materially affect price and cost realism.

Approvals.

FAR 22.103-4 explains how overtime use and overtime premium payments are approved in federal contracts. It covers the contracting officer’s review of contractor overtime requests, the written findings required to justify overtime, who may serve as the agency approving official, when approval is needed before inserting overtime premium amounts into the Payment for Overtime Premiums clause at 52.222-2, and special approval rules for time-and-materials and labor-hour contracts under 52.232-7. It also addresses when no approval is needed, how approvals may be structured at different organizational levels, how to handle requests for overtime above the amount already authorized, when overtime should not be approved at Government expense, and the need for periodic review by the administering office and auditor. Finally, it states that overtime approvals are normally prospective but may be retroactive in emergencies. In practice, this section is meant to control Government exposure to overtime premium costs while still allowing overtime when it is truly necessary to meet schedule, recover from excusable delay, or remove unavoidable production bottlenecks.

Contract clauses.

FAR 22.103-5 tells contracting officers when to include two labor-related contract clauses: the notice of labor disputes clause at 52.222-1 and the payment for overtime premiums clause at 52.222-2. It ties the first clause to solicitations and contracts involving programs or requirements designated under FAR 22.101-1(e), which are the kinds of acquisitions where labor disputes could affect timely performance and government operations. It ties the second clause to cost-reimbursement contracts expected to exceed the simplified acquisition threshold, but it also creates two important exceptions: cost-reimbursement contracts for vessel operation and certain cost-plus-incentive-fee contracts with specified fee swing and contractor share thresholds. In practice, this section is about making sure the government gets advance notice of labor disputes that could disrupt performance and about controlling when overtime premium costs may be paid under cost-reimbursement arrangements. For contracting officers, it is a clause-selection rule that must be applied at solicitation and contract award; for contractors, it signals when they must notify the government of labor issues and when overtime premium costs may or may not be reimbursable.