FAR 52.222-4—Contract Work Hours and Safety Standards -Overtime Compensation.
Plain-English Summary
FAR 52.222-4 implements the Contract Work Hours and Safety Standards statute’s overtime requirements for contracts involving laborers and mechanics. It covers when overtime must be paid, the contractor’s and subcontractor’s liability for unpaid wages and liquidated damages, the Government’s right to withhold funds to cover those liabilities, payroll and basic recordkeeping requirements, Government inspection and employee interview rights, and flowdown requirements to subcontractors and lower-tier subcontractors. In practice, this clause is a compliance and enforcement tool: it ensures covered workers are paid time-and-a-half for hours over 40 in a workweek, gives the Government remedies if that does not happen, and creates documentation and oversight rights so violations can be detected and corrected. It matters both to contractors, who must manage labor costs and subcontract compliance, and to contracting officers, who must monitor, withhold, and assess damages when violations occur. The clause also ties into Department of Labor regulations and the inflation-adjusted liquidated damages rate, so compliance requires attention not just to the contract text but also to current regulatory guidance.
Key Rules
Overtime for covered labor
Contractors and subcontractors employing laborers or mechanics may not require or permit them to work more than 40 hours in a workweek unless they are paid at least 1.5 times their basic rate of pay for each overtime hour. The rule applies to covered laborers and mechanics, not to all employees.
Unpaid wages and damages
If the overtime rule is violated, the responsible contractor and subcontractor are liable for unpaid wages and also for liquidated damages payable to the Government. The contracting officer assesses liquidated damages using the rate in 29 CFR 5.5(b)(2), per affected employee for each calendar day of violation.
Inflation-adjusted penalty rate
The liquidated damages amount is not static. The Department of Labor adjusts the civil monetary penalty for inflation annually under the Federal Civil Penalties Inflation Adjustment Act, so the current rate must be checked rather than assumed.
Government withholding authority
The contracting officer may withhold enough contract payments to satisfy unpaid wages and liquidated damages. If the current contract does not have enough funds, the contracting officer may withhold from other Federal or federally assisted contracts held by the same contractor that are subject to the statute.
Payroll and recordkeeping
The contractor and subcontractors must keep payrolls and basic payroll records for all laborers and mechanics on the contract and make them available to the Government until 3 years after contract completion. Required records include employee identity, classifications, hourly rates, hours worked, deductions, and actual wages paid.
Inspection and interview rights
Authorized representatives of the contracting officer or the Department of Labor may inspect, copy, or transcribe the required records. They may also interview employees at the workplace during working hours, so contractors must be prepared for direct compliance reviews.
Subcontract flowdown and responsibility
The contractor must insert the clause’s requirements in subcontracts that may require or involve laborers and mechanics, and must require lower-tier flowdown as well. The prime contractor remains responsible for subcontractor and lower-tier subcontractor compliance.
Responsibilities
Contractor
Pay covered laborers and mechanics overtime at not less than 1.5 times the basic rate for hours over 40 in a workweek; monitor labor classifications and hours; maintain required payroll and basic records; permit record inspections and employee interviews; flow the clause down to applicable subcontracts; and remain responsible for subcontractor compliance.
Subcontractor
Comply with the overtime pay requirement for covered workers; maintain and provide payroll and basic records; allow inspections and interviews; and include the clause in any lower-tier subcontracts that may involve laborers and mechanics.
Lower-tier subcontractor
Follow the same overtime, recordkeeping, and access requirements when performing covered work, as flowed down through the subcontract chain.
Contracting Officer
Assess liquidated damages when violations occur; withhold contract payments sufficient to cover unpaid wages and damages; and, if needed, withhold from other covered Federal or federally assisted contracts held by the same contractor.
Department of Labor
Provide the regulatory liquidated damages rate referenced by the clause, adjust the civil monetary penalty for inflation annually, and conduct or support compliance oversight through authorized representatives.
Government authorized representatives
Inspect, copy, or transcribe payroll and basic records and interview employees at the workplace during working hours to verify compliance.
Practical Implications
Contractors need a reliable timekeeping and payroll system that distinguishes covered laborers and mechanics from other personnel and tracks weekly hours accurately.
A common pitfall is assuming overtime rules are satisfied by paying a premium only on some hours or under a different internal policy; the clause requires at least time-and-a-half for hours over 40 in the workweek for covered workers.
Prime contractors cannot treat subcontractor violations as someone else’s problem; the clause makes the prime responsible for flowdown and compliance down the chain.
Recordkeeping failures can create compliance problems even if wages were paid correctly, because the Government can inspect records and interview workers to verify what actually happened.
Contracting officers should be prepared to withhold funds quickly when violations are identified, and contractors should expect that unpaid wages and liquidated damages can be collected from current or other covered contracts if necessary.
Official Regulatory Text
As prescribed in 22.305 , insert the following clause: Contract Work Hours and Safety Standards-Overtime Compensation (May 2018) (a) Overtime requirements . No Contractor or subcontractor employing laborers or mechanics (see Federal Acquisition Regulation 22.300 ) shall require or permit them to work over 40 hours in any workweek unless they are paid at least 1 and 1/2 times the basic rate of pay for each hour worked over 40 hours. (b) Violation; liability for unpaid wages; liquidated damages . The responsible Contractor and subcontractor are liable for unpaid wages if they violate the terms in paragraph (a) of this clause. In addition, the Contractor and subcontractor are liable for liquidated damages payable to the Government. The Contracting Officer will assess liquidated damages at the rate specified at 29 CFR 5.5 (b)(2) per affected employee for each calendar day on which the employer required or permitted the employee to work in excess of the standard workweek of 40 hours without paying overtime wages required by the Contract Work Hours and Safety Standards statute (found at 40 U.S.C. chapter 37 ). In accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990 ( 28 U.S.C. 2461 Note), the Department of Labor adjusts this civil monetary penalty for inflation no later than January 15 each year. (c) Withholding for unpaid wages and liquidated damages . The Contracting Officer will withhold from payments due under the contract sufficient funds required to satisfy any Contractor or subcontractor liabilities for unpaid wages and liquidated damages. If amounts withheld under the contract are insufficient to satisfy Contractor or subcontractor liabilities, the Contracting Officer will withhold payments from other Federal or federally assisted contracts held by the same Contractor that are subject to the Contract Work Hours and Safety Standards statute (d) Payrolls and basic records. (1) The Contractor and its subcontractors shall maintain payrolls and basic payroll records for all laborers and mechanics working on the contract during the contract and shall make them available to the Government until 3 years after contract completion. The records shall contain the name and address of each employee, social security number, labor classifications, hourly rates of wages paid, daily and weekly number of hours worked, deductions made, and actual wages paid. The records need not duplicate those required for construction work by Department of Labor regulations at 29 CFR 5.5 (a)(3) implementing the Construction Wage Rate Requirements statute. (2) The Contractor and its subcontractors shall allow authorized representatives of the Contracting Officer or the Department of Labor to inspect, copy, or transcribe records maintained under paragraph (d)(1) of this clause. The Contractor or subcontractor also shall allow authorized representatives of the Contracting Officer or Department of Labor to interview employees in the workplace during working hours. (e) Subcontracts . The Contractor shall insert the provisions set forth in paragraphs (a) through (d) of this clause in subcontracts that may require or involve the employment of laborers and mechanics and require subcontractors to include these provisions in any such lower tier subcontracts. The Contractor shall be responsible for compliance by any subcontractor or lower-tier subcontractor with the provisions set forth in paragraphs (a) through (d) of this clause. (End of clause)