Pay Up You Deadbeat: Frequency of Payment of Wages on U.S. Government Contracts

"A fair day's-wage for a fair day's-work: it is as just a demand as governed men ever made of governing. It is the everlasting right of man." 

- Thomas Carlyle

I have a lawyer doll, which I acquired maybe 30 years ago, long before the Trump tariffs, and when you press his belly, he talks. The funniest line is “Pay up you deadbeat.”

How often do you have to pay your workers engaged to labor on U.S. Government contracts? The answer depends on the type and terms of your U.S. Government contract and the state and local jurisdiction in which you are operating.

If you are performing a federal government or federally assisted construction contract for subcontract, you are required to pay your Davis-Bacon Act (“DBA”) covered employees no less often than weekly. The weekly payroll requirement comes from the terms of the Copeland Act. See 29 C.F.R. § 3.3. The Copeland  Act requirement only applies to laborers and mechanics, and it doesn’t apply to exempt employees working at the construction site.

And if you are performing a service or supply contract or subcontract for the U.S. Government, there is no similar weekly payroll requirement. The Walsh-Healey Public Contracts Act(“PCA”)  is silent on the subject of payroll frequency. And under the Service Contract Act ("SCA"), the wage payment "will be satisfied by the timely payment of such wages."  29 C.F.R. § 4.167.  What constitutes timely payment is left up to state law. 

Unlike the Copeland Act, which covers most US Government construction projects, the SCA does not dictate the weekly payment of wages. Thus, while DBA-covered construction workers' wages must be paid weekly, no other federal law requires such frequency of payment. Under federal law, outside of the construction world, the employer may set a pay period of any duration it likes under the SCA so long as it "is no longer than semi-monthly."  See 29 C.F.R. 4.6(h).  In addition, the SCA rules provide:

(b) The Act does not prescribe the length of the pay period. However, for purposes of administration of the Act, and to conform with practices required under other statutes that may be applicable to the employment, wages and hours worked must be calculated on the basis of a fixed and regularly recurring workweek of seven consecutive 24-hour workday periods, and the records must be kept on this basis. It is appropriate to use this workweek for the pay period. A bi-weekly or semimonthly, pay period may, however, be used if advance notification is given to the affected employees. A pay period longer than semimonthly is not recognized as appropriate for service employees and wage payments at greater intervals will not be considered as constituting proper payments in compliance with the Act.

29 C.F.R. 4.165(b).  

In addition, note that the Obama-era Contractor Minimum Wage Executive Order13658 , which remains in effect, also specifies that the minimum wage therein (currently $13.30 an hour) must be paid by a semi-monthly payroll or more frequently.

As noted above, of course, covered employers must comply with relevant state laws, if applicable.  There is no federal preemption of stricter state or local frequency of payment requirements. Most states have a frequency of payment law and/or a last paycheck law. Texas was one of the last states to provide for a final paycheck deadline. Some states have weekly payroll requirements in certain circumstances. E.g., Rhode Island (although it can be waived by the State).  Also, some work performed on a state funded contract with its own state prevailing wage may also impose a weekly payroll requirement.  

For example, the Virginia Payment of Wage law provides as follows:

A. All employers operating a business or engaging an individual to perform domestic service shall establish regular pay periods and rates of pay for employees except executive personnel. All such employers shall pay salaried employees at least once each month and employees paid on an hourly rate at least once every two weeks or twice in each month, except [with some minor exception for students].

Code of Virginia § 40.1-29.  Thus, Virginia allows semi-monthly payment. 

In sum, figure out what federal wage and hour laws apply to your contract. check to see if there is a Contractor Minimum Wage Executive Order provision in your contract. Look for so-called Little Davis-Bacon Act prevailing wage requirements. And examine the state and local wage laws carefully. Only then will you know the rules on frequency of payment which you must comply with. Note that the worker gets the benefit of whichever legal requirement is more favorable.