The Walsh-Healey Public Contracts Act of 1936

Instructor: Ian Lord

Ian has an MBA and is a real estate investor, former health professions educator, and Air Force veteran.

In this lesson, we will look at what kind of employers are covered under the Walsh-Healey Public Contracts Act of 1936 as well as the rules these employers must follow in their employment practices.

Walsh-Healey Public Contracts Act

The United States government often contracts out work rather than do it on its own, such as construction or transportation. During the Great Depression, there was a need for a law that ensured that contractors were paying and treating their employees fairly. The Walsh-Healey Public Contracts Act of 1936, also known as the PCA, establishes relevant guidance for federal government contractors. Let's take a look at some of the protections granted by the Act as well as how the law is enforced.


Tom owns a contracting business which builds parking lots for US government facilities. The PCA applies to contracts in excess of $10,000 that involve manufacturing or furnishing supplies, articles, or equipment to the United States government and the District of Columbia. Employees working on these contracts must be paid at least the federal minimum wage and are entitled to overtime at one and a half time their pay rate for all of the hours worked beyond the 40-hour workweek. These employees must be at least 16 years old and there are strict limits on the use of prison labor. Tom's business is subject to the PCA.


Tom needs to be aware of the many exceptions to the PCA. Executive, administrative, and professional employees are typically paid on a salary basis and not subject to the Act. Contracts to purchase items from the open market or for agricultural and perishable products aren't covered. If the items aren't being produced or used in the United States, Puerto Rico, or the Virgin Islands than the PCA doesn't apply. Finally, in matters of public interest, the Secretary of Labor can make an administrative exemption.

Compliance and Penalties

To comply with the PCA, Tom needs to post a Department of Labor poster 'Employee Rights on Government Contracts' in a place where employees can easily see it such as a break room or near the time cards. He must keep detailed information about the employees, as well as dates of birth for employees under the age of 19. This information includes names, occupations, mailing addresses, plus wage and hour records.

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