Legal Definitions - Public Contracts Act

The Public Contracts Act, more formally known as the Walsh-Healey Public Contracts Act of 1936, is a United States federal law that establishes labor standards for employees working on certain government contracts. Its primary purpose is to ensure fair wages, safe working conditions, and ethical labor practices for workers involved in fulfilling federal contracts for goods and services.

Specifically, the Act mandates that contractors supplying goods to the U.S. government for amounts exceeding $10,000 must adhere to requirements regarding:

• Payment of minimum wage and overtime pay for hours worked over 40 in a week.
• Prohibition of child labor and convict labor.
• Maintenance of safe and sanitary working conditions.

This law aims to prevent the government from inadvertently supporting businesses that exploit labor or operate unsafe workplaces when procuring necessary supplies.

Examples:

• Example 1: Uniform Manufacturing

  A textile company secures a federal contract worth $500,000 to manufacture and supply uniforms for a branch of the U.S. military. Under the Public Contracts Act, this company is legally obligated to pay its factory workers who produce these uniforms at least the federal minimum wage. Furthermore, if any worker exceeds 40 hours in a workweek, they must receive overtime pay at a rate of one and a half times their regular wage. The company must also ensure that its manufacturing facility meets federal safety and health standards and that no underage workers are employed in the production process.

• Example 2: Specialized Equipment Supply

  A technology firm wins a $250,000 contract to design and deliver specialized computer servers and networking equipment to a federal research laboratory. The Public Contracts Act applies to this contract, requiring the tech firm to ensure that its employees involved in the assembly, testing, and packaging of this equipment are paid according to the Act's wage and hour provisions. This includes paying the federal minimum wage and overtime where applicable, and providing a safe working environment in their labs and production areas.

• Example 3: Office Furniture Procurement

  A furniture manufacturer is awarded a $75,000 contract to supply office desks, chairs, and filing cabinets to several federal government agencies across the country. Because the contract value exceeds $10,000, the Public Contracts Act dictates that the manufacturer must comply with its labor standards. This means the workers in their factories who build these furniture items must be paid at least the federal minimum wage, receive overtime pay for extended hours, and work in conditions that meet established health and safety regulations, free from child or convict labor.