FAR 22.406-6—Payrolls and statements.
Plain-English Summary
FAR 22.406-6 explains how payroll records and statements of compliance are handled for contracts subject to the labor standards clause at 52.222-8, Payrolls and Basic Records. It covers the contractor’s duty to submit weekly payrolls and compliance statements for itself and each subcontractor, the timing and acceptable format of those submissions, and the contracting officer’s authority to withhold payment if payrolls are not submitted promptly. It also addresses how the contracting officer must examine payrolls for compliance, including classifications, wage rates, fringe benefits, hours worked, deductions, and labor mix issues involving laborers, apprentices, trainees, and journeymen. The section further requires the agency to preserve payroll records for three years after contract completion, prohibits returning submitted payrolls to contractors, and allows copies to be provided in limited circumstances. Finally, it warns that payroll records in the Government’s possession must be protected from improper public disclosure because they may contain employee privacy information and contractor proprietary information, including potential FOIA issues. In practice, this section is about creating a paper trail that supports wage compliance, gives the Government a tool to enforce labor standards, and protects sensitive payroll information once it is in Government custody.
Key Rules
Weekly payroll submission
The contractor must submit, or cause to be submitted, weekly payroll copies and weekly statements of compliance for itself and each subcontractor within 7 calendar days after the regular payment date for the payroll week covered. The contractor may use DOL Form WH-347 or another form that provides the same data and identical certification.
Withholding for late payrolls
If payrolls are not submitted promptly, the contracting officer must withhold from payments due an amount considered necessary to protect the Government’s and employees’ interests. This is a protective remedy, not a penalty, and it may be applied until the contractor cures the deficiency.
Payroll examination for compliance
The contracting officer must review payrolls and compliance statements to verify compliance with the contract and applicable statutory or regulatory requirements. Special attention must be paid to classifications and wage rates, fringe benefits, hours worked, deductions, and whether the ratio of laborers, apprentices, or trainees to journeymen appears disproportionate.
Fringe benefits timing
Fringe benefits, contributions, or costs paid on a basis other than weekly may still count as part of weekly payments if they are creditable to the specific weekly period and otherwise acceptable. The key question is whether the benefit can be properly allocated to the week covered by the payroll.
Record retention and availability
The contracting agency must keep payrolls and statements of compliance for 3 years after contract completion and make them available to the Department of Labor upon request during that period. Submitted payrolls may not be returned to the contractor or subcontractor, although copies may be provided to the submitting party or to a higher-tier contractor or subcontractor.
Protection of payroll information
Payroll records in the Government’s possession must be carefully protected from public disclosure unless disclosure is required by law. This reflects employee privacy interests, possible contractor proprietary interests, and the need to evaluate any release request under FOIA and related disclosure rules.
Responsibilities
Contractor
Submit weekly payroll copies and statements of compliance for itself and each subcontractor within 7 calendar days after the regular payment date; ensure the submissions are accurate and complete; use WH-347 or an equivalent form with the same data and certification; respond to payroll review issues; and understand that submitted payrolls will not be returned.
Subcontractor
Provide weekly payroll information and compliance statements through the contractor or otherwise as required so the contractor can meet the submission deadline; maintain accurate payroll records supporting wage and hour compliance.
Contracting Officer
Review payrolls and compliance statements for compliance with the contract and applicable labor requirements; focus on classifications, rates, fringe benefits, hours, deductions, and labor ratios; withhold funds when payrolls are not submitted promptly; and protect payroll records from improper disclosure.
Contracting Agency
Retain payrolls and statements of compliance for 3 years after contract completion; make them available to the Department of Labor upon request; and safeguard payroll records from unauthorized public release.
Department of Labor
Request and review retained payroll records when needed to enforce labor standards or investigate compliance issues during the retention period.
Higher-tier contractor or subcontractor
May receive copies of submitted payrolls when appropriate, but must also handle any received payroll information responsibly and in accordance with disclosure and privacy restrictions.
Practical Implications
Contractors need a reliable weekly process for collecting payroll data from every subcontractor, because the 7-day deadline is short and missing one submission can trigger payment withholding.
Contracting officers should not treat payroll review as a formality; obvious errors in classifications, wage rates, deductions, or apprentice ratios can signal Davis-Bacon or related labor standards problems that require follow-up.
Fringe benefits paid monthly, quarterly, or through benefit plans must be mapped back to the correct weekly period, or the contractor may appear noncompliant even when it is funding benefits properly.
Agencies must treat payroll records as sensitive files, not routine contract paperwork, because they can contain personal and proprietary information and may require FOIA analysis before release.
A common pitfall is assuming that subcontractor payroll compliance is solely the subcontractor’s problem; under this section, the prime contractor remains responsible for ensuring the submissions are made and are timely.
Official Regulatory Text
(a) Submission . In accordance with the clause at 52.222-8 , Payrolls and Basic Records, the contractor must submit or cause to be submitted, within 7 calendar days after the regular payment date of the payroll week covered, for the contractor and each subcontractor, (1) copies of weekly payrolls applicable to the contract, and (2) weekly payroll statements of compliance. The contractor may use the Department of Labor FormWH-347 , Payroll (For Contractor’s Optional Use), or a similar form that provides the same data and identical representation. (b) Withholding for nonsubmission . If the contractor fails to submit copies of its or its subcontractors’ payrolls promptly, the contracting officer shall, from any payment due to the contractor, withhold approval of an amount that the contracting officer considers necessary to protect the interest of the Government and the employees of the contractor or any subcontractor. (c) Examination. (1) The contracting officer shall examine the payrolls and payroll statements to ensure compliance with the contract and any statutory or regulatory requirements. Particular attention should be given to- (i) The correctness of classifications and rates; (ii) Fringe benefits payments; (iii) Hours worked; (iv) Deductions; and (v) Disproportionate employment ratios of laborers, apprentices or trainees to journeymen. (2) Fringe benefits payments, contributions made, or costs incurred on other than a weekly basis shall be considered as a part of weekly payments to the extent they are creditable to the particular weekly period involved and are otherwise acceptable. (d) Preservation . The contracting agency shall retain payrolls and statements of compliance for 3 years after completion of the contract and make them available when requested by the Department of Labor at any time during that period. Submitted payrolls shall not be returned to a contractor or subcontractor for any reason, but copies thereof may be furnished to the contractor or subcontractor who submitted them, or to a higher tier contractor or subcontractor. (e) Disclosure of payroll records . Contractor payroll records in the Government’s possession must be carefully protected from any public disclosure which is not required by law, since payroll records may contain information in which the contractor’s employees have a privacy interest, as well as information in which the contractor may have a proprietary interest that the Government may be obliged to protect. Questions concerning release of this information may involve the Freedom of Information Act (FOIA).