Walsh-Healey Public Contracts Act — Labor Standards for Government Supply Contracts

The Walsh-Healey Public Contracts Act (41 U.S.C. §§ 6501–6511) sets labor standards for companies that supply the federal government with materials, supplies, articles, or equipment under contracts exceeding $15,000. Enacted in 1936 as part of the New Deal, Walsh-Healey requires covered contractors to pay their workers at least the federal minimum wage, maintain safe and sanitary working conditions, employ no child labor (no workers under 16, with limited exceptions), and pay overtime at 1.5× the basic rate for hours worked over 40 in a week. The Act operates alongside the Davis-Bacon Act (which covers construction contracts) and the Service Contract Act (which covers service contracts) — see Federal Procurement & Contracting for the broader procurement context. Together, these three statutes ensure federal purchasing power doesn't drive a race to the bottom on wages and working conditions for the workers producing goods and services the government buys. Together, these three statutes ensure that federal purchasing power doesn't drive a race to the bottom on wages and working conditions.

Current Law (2026)

Legal Authority

• 41 U.S.C. § 6502 — Required contract terms (every government supply contract over $15,000 must include provisions requiring the contractor to pay minimum wage, observe overtime standards, maintain safe working conditions, and comply with child labor restrictions)
• 41 U.S.C. § 6503 — Breach or violation (contractors who breach the required terms are liable for liquidated damages and the government may withhold payments sufficient to cover unpaid wages)
• 41 U.S.C. § 6504 — Three-year prohibition (a contractor found to have violated Walsh-Healey may be barred from receiving government contracts for 3 years — published on a federal ineligible list)
• 41 U.S.C. § 6505 — Exclusions (exemptions for certain purchases including perishable commodities, agricultural products, and purchases from specific entities)
• 41 U.S.C. § 6506 — Administrative provisions (Secretary of Labor administers the Act; may hold hearings, make findings, and determine violations)
• 41 U.S.C. § 6510 — Manufacturers and regular dealers (the contractor must be the actual manufacturer or a regular dealer in the supplies being furnished — preventing middlemen from profiting without maintaining labor standards)

How It Works

Walsh-Healey covers contracts for the manufacture or furnishing of materials, supplies, articles, or equipment to the federal government — supply contracts above $15,000. Service contracts fall under the separate Service Contract Act and construction contracts under Davis-Bacon; the three statutes form a coordinated system ensuring that federal purchasing power doesn't undercut labor standards in manufacturing, construction, or services respectively. Walsh-Healey's core obligations are: pay at least the prevailing minimum wage for the industry and locality, pay overtime at 1.5× the basic hourly rate for hours over 40 in a week, maintain safe and sanitary working conditions, prohibit child labor and convict labor. The manufacturer/regular dealer requirement is a structural anti-evasion provision: contractors must actually manufacture the goods being supplied or normally stock and sell them as regular dealers — preventing paper companies from winning contracts and subcontracting to low-wage manufacturers who never signed the government agreement. Enforcement runs through DOL's Wage and Hour Division, and the penalties have real teeth: contract payment withheld to cover unpaid wages, liquidated damages for overtime violations, contract cancellation, and 3-year debarment from all federal contracts — a consequence that can effectively end a company dependent on government business. Debarred contractors appear on a public ineligible list maintained by DOL.

How It Affects You

If you work at a factory, warehouse, or facility that supplies materials or equipment to the federal government: Walsh-Healey is one of three federal statutes that sets a floor on your wages and working conditions — and it applies to any supply contract over $15,000, which captures most meaningful government purchasing. At minimum, your employer must pay you the federal minimum wage ($7.25/hour as of 2026; some contracts entered into before January 30, 2022 are still covered by EO 13658 at $13.30/hour, rising to $13.65 on May 11, 2026), pay overtime at 1.5× your regular rate for hours over 40 in a workweek, and maintain safe and sanitary working conditions. No child labor under 16. These protections are built into the contract itself — not just a regulatory requirement your employer might overlook. If you believe your employer is violating these terms, file a complaint with the DOL Wage and Hour Division (dol.gov/agencies/whd). WHD can recover back wages and trigger contract suspension, making it a more powerful lever than a standalone FLSA complaint.

If you're a manufacturer or distributor bidding on federal supply contracts: Walsh-Healey compliance is a contract term, not a side obligation. The standard contract clause (48 CFR 52.222-20) binds you to minimum wage, overtime, working conditions, and child labor requirements for the duration of any supply contract over $15,000. The practical risk isn't day-to-day audits — it's what happens when a complaint is filed or a DOL investigation opens. Violations can result in withholding of contract payments to cover unpaid wages, liquidated damages, contract cancellation, and — most damaging — 3-year debarment from all federal contracts. For companies where government business is significant revenue, debarment is existential. The debarred contractor list (the SAM.gov exclusions database) is public, visible to all contracting officers, and applies across every federal agency. Build compliance into your HR and payroll systems before you win the contract, not after.

If you run a supply chain involving subcontractors or contract manufacturers: Walsh-Healey's manufacturer/regular dealer requirement was specifically designed to prevent a company from winning a government contract and then farming production to a low-wage manufacturer to avoid the Act's requirements. To qualify as a covered contractor, you must either manufacture the goods yourself or be a regular dealer who normally stocks and sells them. If you're a paper intermediary — winning contracts and sourcing everything to an unnamed third party — you likely don't qualify as a "regular dealer" and may not be able to legitimately perform the contract at all. This matters especially for technology resellers, custom manufacturers, and companies with complex multi-tier supply chains. Foreign manufacturing raises additional complications: foreign workers in the supply chain aren't directly covered by Walsh-Healey, but the prime contractor remains responsible for ensuring the goods delivered comply with U.S. requirements.

If you're a contracting officer or work in federal procurement: Walsh-Healey clauses must be included in all applicable supply contracts exceeding $15,000 — this is a mandatory FAR requirement (48 CFR 22.6), not optional. Omitting the clause doesn't eliminate the contractor's obligations, but it does complicate enforcement. More practically: if a contractor you're managing is subject to a DOL investigation, your agency may be required to withhold contract payments pending resolution — which affects your program schedule and your contractor's cash flow. Coordinate with your agency's counsel and DOL when violations arise; the withholding remedy is administratively complex and requires proper documentation. The $15,000 threshold is not indexed to inflation and has not changed since the statute was written — in practice, it captures the vast majority of government supply purchases.

State Variations

Walsh-Healey applies to federal supply contracts only:

• State prevailing wage laws may apply to state government purchases
• State minimum wage rates may exceed the federal rate, and the higher rate applies
• State overtime laws may provide additional protections
• State child labor laws may be more restrictive than federal requirements

Implementing Regulations

• 41 CFR Part 50-201 through 50-206 — Walsh-Healey Public Contracts Act regulations — coverage and exemptions, safety and health standards, minimum wage determinations, overtime requirements, and child and convict labor prohibitions

• 41 CFR Part 50-204 — Safety and Health Standards for Federal Supply Contracts (37 sections across 5 subparts; authority: 41 U.S.C. § 35): the DOL's substantive workplace safety and health standards that federal supply contractors must meet as a condition of contract performance. Part 50-204 predates OSHA (enacted 1970) and paralleled the OSHA standards that were adopted later — today, many Part 50-204 provisions mirror OSHA standards but remain separately codified as contractor-specific requirements. Key provisions:

  • § 50-204.2 — General safety and health standards: every contractor must protect employee safety by complying with the standards described in this Part whenever an applicable OSHA standard under 29 CFR Parts 1910 or 1926 applies to the same hazard — the general duty to comply with OSHA-equivalent standards is incorporated by reference; where no specific OSHA standard addresses a hazard, contractors must take precautions to prevent recognized hazards likely to cause death or serious physical harm
  • § 50-204.10 — Occupational noise exposure: protection against the effects of noise exposure must be provided when sound levels (measured on the A scale of a standard sound level meter) exceed the thresholds in Table I — 90 dBA for an 8-hour time-weighted average (TWA); the table follows the OSHA permissible exposure limit structure, with maximum durations increasing as decibel levels decrease; when engineering and administrative controls cannot reduce noise to permissible levels, hearing protection equipment must be provided and used; audiometric testing programs and hearing conservation programs are required at the 85 dBA action level
  • § 50-204.20–50-204.35 — Radiation standards (Subpart C, 17 sections): this is the most extensive subpart — covering ionizing radiation (alpha, beta, gamma rays, X-rays, neutrons, high-speed electrons and protons); no employer may allow any employee in a restricted area to receive ionizing radiation in excess of specified whole-body doses per calendar quarter (§50-204.21); airborne radioactive material concentrations in restricted areas must not exceed the Maximum Permissible Concentrations (MPCs) in the table of Appendix B (§50-204.22); personal monitoring equipment must be supplied to workers in restricted areas where exposure exceeds certain fractions of the permissible limit (§50-204.23); areas containing radioactive materials and radiation sources must be posted with caution signs bearing the standard radiation symbol (magenta or purple on yellow) (§50-204.24); radiation exposure records must be maintained and provided to employees on request (§50-204.30); these standards were originally issued when nuclear and radiation industries were rapidly expanding and OSHA's radiation standards had not yet been promulgated
  • Subpart D — Gases, Vapors, Fumes, Dusts, and Mists (9 sections): threshold limit values (TLVs) for airborne chemical concentrations in contractor workplaces; contractors must comply with the permissible exposure limits (PELs) established under 29 CFR 1910.1000 for air contaminants; where engineering controls cannot reduce exposures to permissible limits, personal protective equipment must be provided; ventilation requirements for welding, cutting, and painting operations are specified

  Part 50-204 applies to manufacturers and suppliers under contracts over $15,000 for articles manufactured in U.S. facilities — OSHA applies to all workplaces, but Part 50-204 creates a parallel enforcement mechanism (contract debarment) for federal contractors. Variances from Part 50-204 standards may be granted (§50-204.1a) under the same conditions as OSHA variance procedures under 29 CFR Part 1905 — a contractor that has received an OSHA variance from the parallel standard may apply for equivalent relief from Part 50-204.

• 48 CFR 22.6 — FAR Subpart 22.6 (Walsh-Healey Public Contracts Act) — contract clause requirements, applicability thresholds, and contractor compliance obligations

• 48 CFR 52.222-20 — Walsh-Healey Public Contracts Act standard contract clause — incorporated into supply contracts exceeding the $15,000 threshold, binding the contractor to the Act's labor standards

Pending Legislation

No standalone Walsh-Healey reform bills have been introduced in the 119th Congress. Federal contractor labor standards appear in broader labor and procurement legislation — see Federal Minimum Wage and Federal Procurement & Contracting.

Recent Developments

See also Truth in Negotiations Act for the cost transparency requirements on negotiated defense contracts. Executive Order 14026 (April 27, 2021; effective January 30, 2022) had raised the minimum wage for federal contractors to $15.00/hour with annual indexing — reaching $17.75/hour as of January 1, 2025 — effectively superseding Walsh-Healey's minimum wage requirement (which referenced the FLSA minimum of $7.25) for most covered workers. EO 14026 was revoked by EO 14236 in March 2025. The interaction between Walsh-Healey and modern supply chain practices (global manufacturing, just-in-time delivery, contract manufacturing) continues to present compliance challenges, particularly for companies with complex multi-tier supply chains.

• Trump revokes federal contractor minimum wage EO (2025): Executive Order 14236 ("Additional Rescissions of Harmful Executive Orders and Actions," March 14, 2025) revoked Biden's EO 14026, eliminating the $17.75/hour (effective January 1, 2025) minimum wage for federal contractors covered by post-January-30, 2022 contracts. Walsh-Healey's minimum wage reverted to the FLSA federal minimum of $7.25/hour (or the higher state minimum) for newly formed or renewed contracts after January 30, 2022; contracts entered into before that date remain covered by the Obama-era EO 13658 (currently $13.30/hour, rising to $13.65 effective May 11, 2026) — the first reduction in the effective federal contractor wage floor in decades. DOL ceased enforcement of EO 14026 and 29 CFR Part 23.
• "Buy American" and Walsh-Healey intersection: Trump executive orders on domestic manufacturing — including EO 14005 on "Ensuring the Future is Made in All of America" — reinforced Walsh-Healey's domestic manufacturing preference by adding domestic content scoring criteria to supply contract awards. Agencies were directed to prioritize suppliers who manufactured goods in the U.S. and employed U.S. workers under FLSA-compliant conditions. Walsh-Healey's existing framework for certifying domestic manufacture became more operationally significant as agencies implemented broader Buy American requirements.
• Defense supply chain audit — Walsh-Healey compliance gaps: The DOD Inspector General and GAO reported in 2025 that Walsh-Healey labor standard enforcement in defense supply chains is limited to prime contractors — subcontractors and third-tier suppliers are rarely audited. With increasing defense production urgency (Ukraine aid, Taiwan deterrence, domestic stockpile rebuild), DOD has prioritized speed over compliance verification. The IG recommended systematic subcontractor payroll audits for contracts over $100,000, but DOD has not implemented systematic audit expansion due to capacity constraints.
• Overtime and safety provisions — modernization pressure: Walsh-Healey's overtime and safety standards — written in 1936 — reference FLSA overtime (1.5x pay after 40 hours) and OSHA standards by cross-reference, meaning Walsh-Healey's substantive requirements evolve as FLSA and OSHA change. The Trump administration's OSHA regulatory rollback (reducing heat illness standards, ergonomics guidance) effectively reduced Walsh-Healey's safety floor for supply contract workers in sectors with high heat and musculoskeletal injury rates (warehousing, manufacturing, food processing).