pensation, as follows: "In determining any overtime pay to which such service employees are entitled under any Federal law, the regular or basic hourly rate of such an employee shall not include any fringe benefit payments computed hereunder which are excluded from the regular rate under the Fair Labor Standards Act by provisions of section 7(e) thereof." Fringe benefit payments which qualify for such exclusion are described in Part 778, Subpart C of this title. The interpretations there set forth will be applied in determining the overtime pay to which covered service employees are entitled under other Federal statutes. The effect of section 6 of the Act in situations where equivalent fringe benefits or cash payments are provided in lieu of the specified fringe benefits (see § 4.170) is stated in § 4.55 of Subpart B of this part, and illustrated in § 4.182.

§ 4.181 Overtime pay provisions of other Acts.

(a) Fair Labor Standards Act. Although provision has not been made for insertion in Government contracts of stipulations requiring compliance with the Fair Labor Standards Act, contractors and subcontractors performing contracts subject to the McNamara-O'Hara Service Contract Act may be required to compensate their employees working on or in connection with such contracts for overtime work pursuant to the overtime pay standards of the Fair Labor Standards Act. This is true with respect to employees engaged in interstate or foreign commerce or in the production of goods for such commerce (including occupations and processes closely related and directly essential to such production) and employees employed in enterprises which are so engaged, subject to the definitions and exceptions provided in such Act. Such employees, except as otherwise specifically provided in such Act, must receive overtime compensation at a rate of not less than 11⁄2 times their regular rate of pay for all hours worked in excess of the applicable standard in a workweek. See Part 778 of this title. However, the Fair Labor Standards Act provides no overtime pay requirements for employees, not within such interstate commerce coverage of the Act, who are subject to its minimum wage provisions only by virtue of the provisions of section 6(e), as explained in § 4.160.

(b) Contract Work Hours Standards Act. (1) The Contract Work Hours Standards Act (40 U.S.C. 327-332) ap'plies generally to Government contracts, including service contracts in excess of $2,500, which may require or involve the employment of laborers and mechanics. Guards, watchmen, and many other classes of service employees are laborers or mechanics within the meaning of such Act. However, employees rendering only professional services, seamen, and as a general rule those whose work is only clerical or supervisory or nonmanual in nature, are not deemed laborers or mechanics for purposes of the Act. The wages of every laborer or mechanic for his performance of work on such contracts must include compensation at a rate not less than 11⁄2 times his basic rate of pay for all hours worked in any workweek in excess of 40 or in excess of eight on any calendar days therein, whichever is the greater number of overtime hours. Exemptions are provided for transportation and communications contracts, contracts for the purchase of supplies ordinarily available in the open market, and work required to be done in accordance with the provisions of the Walsh-Healey Act.

(2) Regulations concerning this Act are contained in Part 5, and § 5.14(c) of this subtitle permits overtime pay to be computed in the same manner as under the Fair Labor Standards Act, subject of course to the differences in computations required by reason of the daily overtime provision of the Contract Work Hours Standards Act, which has no counterpart in the Fair Labor Standards Act.

(3) Although the application of the Contract Work Hours Standards Act does not depend on inclusion of its requirements in provisions physically made part of the contract, the regulations of the Secretary require such provisions to be set forth in contract clauses. (See § 5.5(c) of this subtitle.)

(c) Walsh-Healey Public Contracts Act. As pointed out in § 4.122, while some Government contracts may be subject both to the McNamara-O'Hara Service Contract Act and to the Walsh-Healey Public Contracts Act, the employees performing work on the contract which is subject to the latter Act are, when so engaged, exempt from the provisions of the former. They are, however, subject to the overtime provisions of the WalshHealey Act if, in any workweek, any of

the work performed for the employer is subject to such Act and if, in such workweek, the total hours worked by the employee for the employer (whether wholly or only partly on such work) exceed 40 hours in the workweek or 8 hours in any day therein. In any such workweek the Walsh-Healey Act requires payment of overtime compensation at a rate not less than 11⁄2 times the employee's basic rate for such weekly or daily overtime hours, whichever are greater in number. The overtime pay provisions of the Walsh-Healey Act are discussed in greater detail in the Rulings and Interpretations issued under such Act, copies of which are available from any office of the Wage and Hour and Public Contracts Divisions, U.S. Department of Labor.

§ 4.182

Overtime pay of service employees entitled to fringe benefits. Reference is made in § 4.180 to the rules prescribed by section 6 of the Act and Subpart B of this part which permit exclusion of certain fringe benefits and equivalents provided pursuant to section 2(a)(2) of the Act from the regular or basic rate of pay when computing overtime compensation of a service employee under the provisions of any other Federal law. As provided in § 4.55 of Subpart B, not only those fringe benefits excludable under section 6 as benefits determined and specified under section 2(a) (2), but also equivalent fringe benefits and cash payments authorized under Subpart B to be furnished in lieu of the specified benefits may be excluded from the regular or basic rate of such an employee. The application of this rule may be illustrated by the following examples:

(a) The A company pays a service employee $3.50 an hour in cash under a wage determination which requires a monetary rate of not less than $3 and a fringe benefit contribution of 50 cents which would qualify for exclusion from the regular rate under section 7(e) of the Fair Labor Standards Act. The contractor pays the 50 cents in cash because he made no contributions for fringe benefits specified in the determination and the contract. Overtime compensation in this case would be computed on a regular or basic rate of $3 an hour.

(b) The B Company has for some time been paying $3.25 an hour to a service employee as his basic cash wage plus 25 cents an hour as a contribution to a welfare and pension plan, which contribution qualifies for exclusion from the regular rate under the Fair Labor Standards Act. For performance of work under a contract subject to the

Act a monetary rate of $3 and a fringe benefit contribution of 50 cents (also qualifying for such exclusion) are specified because found to be prevailing for such employees in the locality. The contractor may credit his 25-cent welfare and pension contribution toward the discharge of his fringe benefit obligation under the contract and make an additional contribution of 25 cents for the specified or equivalent fringe benefits or pay the employee an additional 25 cents in cash, as authorized in Subpart B of this part. These contributions or equivalent payments may be excluded from the employee's regular rate, which remains $3.25, the rate agreed upon as the basic cash wage.

(c) The C company has been paying $3 an hour as its basic cash wage on which the firm has been computing overtime compensation. For performance of work on a contract subject to the Act the same rate of monetary wages and a fringe benefit contribution of 50 cents an hour (qualifying for exclusion from the regular rate under the Fair Labor Standards Act) are specified in accordance with a determination that these are the monetary wages and fringe benefits prevailing for such employees in the locality. The contractor is required to continue to pay at least $3 an hour in monetary wages and at least this amount must be included in the employee's regular or basic rate for overtime purposes under applicable Federal law. His fringe benefit obligation under the contract would be discharged if 50 cents of the contributions for fringe benefits were for the fringe benefits specified in the contract or equivalent benefits as defined in Subpart B of this part. He may exclude such fringe benefit contributions from the regular or basic rate of pay of the service employee in computing overtime pay due. Exclusion of the remainder of the fringe benefit contributions from the regular rate under the Fair Labor Standards Act would depend on whether they are contributions excludable under section 7(e) of that Act.

NOTICE TO EMPLOYEES

§ 4.183 Employees must be notified of compensation required.

The Act, in section 2(a) (4), and the regulations thereunder in § 4.6 (e), require all contracts subject to the Act which are in excess of $2,500 to contain a clause requiring the contractor or subcontractor to notify each employee commencing work on a contract to which the Act applies of the compensation required to be paid such employee under section 2(a) (1) and the fringe benefits required to be furnished under section 2(a) (2). A notice form provided by the Wage and Hour and Public Contracts Divisions is to be used for this purpose. It may be delivered to the employee or posted as stated in § 4.184.

§ 4.184 Posting of notice.

Posting of the notice provided by the Wage and Hour and Public Contracts Divisions shall be in a prominent and accessible place at the worksite, as required by § 4.6(e). The display of the notice in a place where it may be seen by employees performing on the contract will satisfy the requirement that it be in a "prominent and accessible place". Should display be necessary at more than one site, in order to assure that it is seen by such employees, additional copies of the poster may be obtained without cost from the Divisions. The contractor or subcontractor is required to attach to the poster a listing of all minimum monetary wages and fringe benefits, as specified in the contract, to be paid or furnished to the classes of service employees performing on the contract.

§ 4.185

RECORDS

Recordkeeping requirements. The records which a contractor or subcontractor is required to keep concerning employment of employees subject to the Act are specified in § 4.6 (g) of Subpart A of this part. They are required to be maintained for 3 years from the completion of the work, and must be made available for inspection and transcription by authorized representatives of the Administrator. Such records must be kept for each service employee performing work under the contract, for each workweek during the performance of the contract. If the required records are not separately kept for the service employees performing on the contract, it will be presumed, in the absence of affirmative proof to the contrary, that all service employees in the department or establishment where the contract was performed were engaged in covered work during the period of performance. (See § 4.173.)

SAFETY AND HEALTH PROVISIONS

tary or hazardous or dangerous to the health or safety of a service employee engaged to furnish the services". Regulations under this provision are set forth in Part 1516 of this title.

§ 4.187

ENFORCEMENT

Recovery of underpayments.

(a) The Act, in section 3(a) provides that any violation of any of the contract stipulations required by section 2(a) (1) or (2) or of section 2(b) of this Act shall render the party responsible therefor liable for a sum equal to the amount of any deductions, rebates, refunds, or underpayments of compensation due to any employee engaged in the performance of such contract. So much of the accrued payment due on the contract or any other contract between the same contractor and the Federal Government may be withheld as is necessary to pay such employees. Such withheld sums shall be held in a deposit fund. On order of the Secretary, any compensation which the head of the Federal agency or the Secretary has found to be due pursuant to this Act shall be paid directly to the underpaid employees from any accrued payments withheld under this Act.

(b) The Act, in section 5(b), provides that, if the accrued payments withheld under the terms of the contract are insufficient to reimburse all service employees with respect to whom there has been a failure to pay the compensation required pursuant to this Act, the United States may bring action against the contractor, subcontractor, or any sureties in any court of competent jurisdiction to recover the remaining amount of underpayments. Any sums thus recovered by the United States shall be held in the deposit fund and shall be paid, on the order of the Secretary, directly to the underpaid employee or employees. Any sum not paid to an employee because of inability to do so within 3 years shall be covered into the Treasury of the United States as miscellaneous receipts.

§ 4.188 Ineligibility for further contracts when violations occur.

Section 5 of the Act directs the Comptroller General to distribute a list to all agencies of the Government giving the names of persons or firms that the Federal agencies or the Secretary have found violated this Act. Unless the Secretary otherwise recommends, no contract of the United States shall be awarded to

the persons or firms appearing on this list or to any firm, corporation, partnership, or association in which such persons or firms have a substantial interest until 3 years have elapsed from the date of publication of the list containing the name of such persons or firms. This prohibition against the award of a contract to an ineligible contractor applies to him in the capacity of either a prime contractor or a subcontractor.

§ 4.189

Administrative proceedings relating to enforcement of labor standards.

The Secretary is authorized, pursuant to the provisions of section 4(a) of the Act, to hold hearings and make such decisions based upon findings of fact as are deemed to be necessary to enforce the provisions of the Act. The Secretary's findings of fact after notice and hearing are declared to be conclusive upon all agencies of the United States and, if supported by a preponderance of the evidence, conclusive in any court of the United States. Rules of practice for administrative proceedings under this authority are set forth in Part 6 of this subtitle.

§ 4.190 Contract cancellation.

As provided in section 3 of the Act, when a violation is found of any contract stipulation, the contract is subject upon written notice to cancellation by the contracting agency. Whereupon, the United States may enter into other contracts or arrangements for the completion of the original contract, charging any additional cost to the original contractor. § 4.191

Complaints and compliance as

sistance.

(a) Any employer, employee, labor or trade organization, or other interested person or organization may report to any office of the Wage and Hour and Public Contracts Divisions (or to any office of the Bureau of Labor Standards, in instances involving the safety and health provisions), a violation, or apparent violation of the act, or of any of the rules or regulations prescribed thereunder. Such offices are also available to assist or provide information to contractors or subcontractors desiring to ensure that their practices are in compliance with the Act. Information furnished is treated confidentially.

(b) A report of breach or violation relating solely to safety and health re

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quirements may be in writing and addressed to the Regional Director of a Bureau of Labor Standards' Regional Office, U.S. Department of Labor or to the Director of the Bureau of Labor Standards, U.S. Department of Labor, Washington, D.C. 20210.

(c) Any other report of breach or violation may be in writing and addressed to the Regional Director of a Wage and Hour and Public Contracts Divisions' Regional Office, U.S. Department of Labor, or to the Administrator of the Wage and Hour and Public Contracts Divisions, U.S. Department of Labor, 14th Street and Constitution Avenue NW., Washington, D.C. 20210.

(d) In the event that a Regional Director of the Wage and Hour and Public Contracts Divisions is notified of a breach or violation which also involves safety and health standards, such Director shall notify the appropriate Regional Director of the Bureau of Labor Standards who shall with respect to the safety and health violation take action commensurate with his responsibilities pertaining to safety and health standards.

(e) The report should contain the following:

(1) The full name and address of the person or organization reporting the breach or violations.

(2) The full name and address of the person against whom the report is made.

(3) A clear and concise statement of the facts constituting the alleged breach or violation of any of the provisions of the McNamara-O'Hara Service Contract Act, or of any of the rules or regulations prescribed thereunder.

(a) The regulations contained in this part are promulgated in order to coordinate the administration and enforcement of the labor standards provisions of each of the following acts by the Federal agencies responsible for their administration and such additional statutes as may from time to time confer upon the Secretary of Labor additional duties and responsibilities similar to those conferred upon him under Reorganization Plan No. 14 of 1950:

The Davis-Bacon Act (40 U.S.C. 276a276a-7), and as extended to the Federal-Aid Highway Act of 1956 (23 U.S.C. 113). Copeland Act (40 U.S.C. 276c).

The Contract Work Hours Standards Act (40 U.S.C. 327-330).

National Housing Act (12 U.S.C. 1713, 1715a, 1715c, 1715k, 1715(d) (3) and (4), 1715v, 1715w, 1715x, 1743, 1747, 1748b, 1748h-2, 1750g).

Hospital Survey and Construction Act (42 U.S.C. 291h).

Federal Airport Act (49 U.S.C. 1114). Housing Act of 1949 (42 U.S.C. 1459). School Survey and Construction Act of 1950 (20 U.S.C. 636).

Defense Housing and Community Facilities and Services Act of 1951 (42 U.S.C. 15921). United States Housing Act of 1937 (42 U.S.C. 1416).

Federal Civil Defense Act of 1950 (50 U.S.C. App. 2281).

Area Redevelopment Act (42 U.S.C. 2518). Delaware River Basin Compact (sec. 15.1, 75 Stat. 714).

Health Professions Educational Assistance Act of 1963 (42 U.S.C. 292d(c) (4), 293a (c) (5)).

Mental Retardation Facilities Construction Act (42 U.S.C. 295(a) (2) (d), 2662(5), 2675(a) (5)). Community Mental Health Centers Act (42 U.S.C. 2685 (a) (5)).

Higher Educational Facilities Act of 1963 (20 U.S.C. 753).

Vocational Educational Act of 1963 (20 U.S.C. 351).

Library Services and Construction Act (20 U.S.C. 355c (a) (4)).

Urban Mass Transportation Act of 1964 (sec. 10a, 78 Stat. 307).

Economic Opportunity Act of 1964 (sec. 607, 78 Stat. 532).

Public Health Service Act (sec. 605(a) (5), 78 Stat. 454).

Housing Act of 1964 (78 Stat. 797).

The Commercial Fisheries Research and Development Act of 1964 (sec. 7, 78 Stat. 199). The Nurse Training Act of 1964 (sec. 2, 78 Stat. 910).

Elementary and Secondary Education Act of 1965 (20 U.S.C. 239).

Federal Water Pollution Control Act (33 U.S.C.466).

Appalachian Regional Development Act of 1965 (79 Stat. 5, 21, sec. 402).

National Technical Institute for the Deaf Act (79 Stat. 125, 126, sec. 5(b) (5)).

(b) Sections 5.3 and 5.4 contain the Department's procedural rules governing requests for wage determinations under the Davis-Bacon Act and its related statutes listed in § 1.1 of this subtitle and the use of such wage determinations.

[29 F.R. 99, Jan. 4, 1964, as amended at 30 F.R. 13136, Oct. 15, 1965]