The Copeland Act, based upon legislation originally passed in 1934, makes it illegal for anyone to induce persons employed under a federal contract for the construction or repair of a public building or a public work to give up any part of their compensation.

This so-called anti-kickback provision of the Act is mandatory for all contractors and subcontractors working on federal construction projects. Department of Labor regulations implementing the Copeland Act apply only to federally-funded contracts worth more than $2,000 and federally-assisted contracts worth more than $2,000 that are subject to federal wage standards. The Copeland Act does not apply where the only federal assistance to a contract is a loan guarantee.

Requirements

The Copeland Act helps to ensure that employees working on federally-funded construction projects are not denied the prevailing wages and fringe benefits that are guaranteed to them by the Davis-Beacon Act. The Copeland Act prevents covered contractors and subcontractors from in any way inducing their employees to give up any part of the compensation to which they are entitled by the contract. The Copeland Act also guarantees these employees the right to be paid on a weekly basis.

To comply with the Copeland Act, contractors and subcontractors who are subject to federal wage standards must submit weekly wage statements to the Wage and Hour Division of the Department of Labor. They must also comply with regulations governing proper payroll deductions. Employers may not make payroll deductions that are not authorized by the Secretary of Labor. In its regulations, the Department of Labor has set forth acceptable payroll deductions, including deductions for withholding taxes and health insurance premiums. Employers wishing to make payroll deductions that are not included on the list must make an application to the Secretary of Labor for explicit permission to do so.

Enforcement of the Copeland Act

Employees who believe that their rights under the Copeland Act have been violated may file a complaint with the Wage and Hour Division of the Employment Standards Administration of the Department of Labor.

Contractors or subcontractors who violate the Copeland Act may be subject to a fine up to $5,000 or imprisonment up to five years or both. Willful falsification of compliance records subjects contractors to civil and criminal prosecution, contract termination, or debarment from participating in future government contracts. These determinations are subject to appeal, first before an administrative law judge and, if required, in the federal courts.

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