FAR 22.406-7—Compliance checking.
Plain-English Summary
FAR 22.406-7 explains how contracting officers are supposed to monitor compliance with the labor standards requirements in covered contracts. It covers the contracting officer’s duty to make whatever checks and investigations are needed, the specific elements of regular compliance checking, and when special compliance checks are warranted. The regular checks described here include employee interviews, on-site inspections, payroll reviews, and comparison of those findings with other available records such as daily inspector reports and construction logs. The section also addresses how to respond to inconsistencies, errors, omissions, and complaints alleging violations, including what to do when a complaint is too vague to investigate. In practice, this provision is the enforcement backbone for labor standards administration: it helps the government detect misclassification, underpayment, fringe benefit problems, inaccurate payrolls, posting failures, and other Davis-Bacon or related labor standards issues before they become larger compliance or payment disputes.
Key Rules
Contracting officer must check compliance
The contracting officer is required to make the checks and investigations necessary to ensure compliance with the labor standards requirements in covered contracts. The level of effort is not fixed; it must be sufficient to verify that the contractor and subcontractors are following the contract’s labor standards obligations.
Regular checks include interviews
Employee interviews are a core compliance tool and are used to verify worker classifications, wage rates, fringe benefit payments, and hours worked. Standard Form 1445 is referenced as the tool for documenting these interviews.
On-site inspections are required
The contracting officer should conduct on-site inspections to confirm the type of work being performed, the number and classification of workers, and whether required labor standards postings are in place. This helps verify that what is happening at the job site matches the contract and payroll records.
Payrolls must be reviewed
Payroll reviews are required to confirm that prime contractor and subcontractor payrolls are submitted on time, are complete, and comply with contract requirements. This review is intended to catch missing, late, or inaccurate payroll submissions and other labor standards deficiencies.
Cross-check records for consistency
Information gathered through interviews, inspections, and payroll reviews must be compared with other available records, including daily inspector reports and daily construction logs. The purpose is to identify inconsistencies that may indicate noncompliance or incomplete reporting.
Special checks for problems or complaints
Special compliance checks are required or may be needed when regular checks reveal inconsistencies, errors, or omissions, or when a complaint alleges violations. If a complaint lacks enough detail to investigate, the complainant must be told so and asked to provide additional information.
Responsibilities
Contracting Officer
Conduct the compliance checks and investigations needed to ensure labor standards compliance. Perform or arrange regular checks, review payrolls, inspect the site, compare records, and initiate special checks when problems or complaints arise.
Contractor
Provide accurate payrolls and comply with labor standards requirements on the contract. Cooperate with interviews, inspections, and record reviews, and ensure subcontractors also submit complete and timely payroll information.
Subcontractors
Submit payrolls on time and in compliance with contract requirements, and follow the applicable labor standards obligations on the project. Their records and work practices are subject to the same compliance scrutiny as the prime contractor’s.
Complainant
If alleging violations, provide a complaint with enough specificity to allow investigation. If the complaint is too vague, the complainant must supply additional information when asked.
Agency/Inspector Personnel
Maintain daily inspector reports, daily logs of construction, and other records that can be used to compare against interview and payroll data. These records support the contracting officer’s compliance verification efforts.
Practical Implications
This section makes labor standards enforcement an active, ongoing responsibility rather than a paper-only review. Contractors should expect site visits, worker interviews, and record comparisons, not just payroll submission checks.
Misclassification, incorrect wage rates, fringe benefit errors, and incomplete payrolls are common problem areas that regular compliance checks are designed to uncover. Even small discrepancies can trigger deeper review.
Daily logs and inspector reports matter because they can be used to test whether payrolls and interview statements are credible. Contractors should keep field records aligned with payroll and classification practices.
A vague complaint does not stop the process, but it can delay it until the complainant provides more detail. Contracting officers should document the request for clarification and follow up promptly.
Prime contractors remain exposed to subcontractor payroll and labor standards problems. In practice, primes need oversight systems to ensure subcontractor compliance, not just their own internal compliance.
Official Regulatory Text
(a) General . The contracting officer shall make checks and investigations on all contracts covered by this subpart as may be necessary to ensure compliance with the labor standards requirements of the contract. (b) Regular compliance checks . Regular compliance checking includes the following activities: (1) Employee interviews to determine correctness of classifications, rates of pay, fringe benefits payments, and hours worked. (See Standard Form 1445 .) (2) On-site inspections to check type of work performed, number and classification of workers, and fulfillment of posting requirements. (3) Payroll reviews to ensure that payrolls of prime contractors and subcontractors have been submitted on time and are complete and in compliance with contract requirements. (4) Comparison of the information in this paragraph (b) with available data, including daily inspector’s report and daily logs of construction, to ensure consistency. (c) Special compliance checks . Situations that may require special compliance checks include - (1) Inconsistencies, errors, or omissions detected during regular compliance checks; or (2) Receipt of a complaint alleging violations. If the complaint is not specific enough, the complainant shall be so advised and invited to submit additional information.