29 C.F.R. § 5.9

Suspension of funds

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(a) Suspension and withholding. In the event of failure or refusal of the contractor or any subcontractor to comply with the applicable statutes referenced by § 5.1 and the labor standards clauses contained in § 5.5, whether incorporated into the contract physically, by reference, or by operation of law, the Federal agency (and any other agency), may, upon its own action, or must, upon written request of an authorized representative of the Department of Labor, take such action as may be necessary to cause the suspension of the payment, advance, or guarantee of funds until such time as the violations are discontinued and/or until sufficient funds are withheld as may be considered necessary to compensate workers for the full amount of wages and monetary relief to which they are entitled, and to cover any liquidated damages and pre-judgment or post-judgment interest which may be due.

(b) Cross-withholding. To satisfy a contractor's liability for back wages on a contract, in addition to the suspension and withholding of funds from the contract(s) under which the violation(s) occurred, the necessary funds also may be withheld under any other Federal contract with the same prime contractor, or any other federally assisted contract that is subject to Davis-Bacon labor standards and/or the Contract Work Hours and Safety Standards Act and is held by the same prime contractor, regardless of whether the other contract was awarded or assisted by the same agency.

(c) Cross-withholding from different legal entities. Cross-withholding of funds may be requested from contracts held by other entities that may be considered to be the same prime contractor as that term is defined in § 5.2. Such cross-withholding is appropriate where the separate legal entities have independently consented to it by entering into contracts containing the withholding provisions at § 5.5(a)(2) and (b)(3). Cross-withholding from a contract held by a different legal entity is not appropriate unless the withholding provisions were incorporated in full or by reference in that different legal entity's contract. Absent exceptional circumstances, cross-withholding is not permitted from a contract held by a different legal entity where the Davis-Bacon labor standards were incorporated only by operation of law into that contract.

[88 FR 57740, Aug. 23, 2023]

Notes of Decisions

Cited in 7 cases (3 in the last 5 years), 1979–2022 · leading case: Favel v. Am. Renovation & Constr. Co., 2002 MT 266 (Mont. 2002).

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Favel v. Am. Renovation & Constr. Co., 2002 MT 266 (Mont. 2002). · cites it 8× “29 C.F.R. § 5.9 . See also, 29 C.F.R. § 5.”

Int'l Bhd. Elec v. Farfield Co, 5 F.4th 315 (3rd Cir. 2021). “5,” 29 C.F.R. § 5.9 (emphasis added), but the relevant statute calls only for contractual stipulations that there “may be withheld -45- from the contractor so much of the accrued payments as the contracting officer considers necessary” to pay the required wages.”

Sorenson v. Wadsworth Bros. Construct, 48 F.4th 1146 (10th Cir. 2022). “…withheld payments, contract termination, and debarment.” T & H Servs., 8 F.4th at 956 (citing 40 U.S.C. §§ 3142–44; 29 C.F.R. §§ 5.9 , 5.12; 48 C.F.R. §§ 22 .406–9, 22.406–11). “If withheld sums are insufficient to adequately compensate employees who have been underpaid, the…”

Proj. B.A.S.I.C. v. Kemp, 947 F.2d 11 (1st Cir. 1991). “See 29 C.F.R. § 5.9 (1990) (authorizing DOL orders to enforce prevailing wage-rate laws); see also Davis-Bacon Act, 40 U.”

Ames Constr. Co. v. Dole, 727 F. Supp. 502 (D. Minnesota 1989). “a federal agency, upon its own action or upon written request of an authorized representative of the Department of Labor, shall take such action as may be necessary to cause a suspension of the payment, advance or guarantee of funds____ 29 C.F.R. § 5.9 . The Act provides that…”

Stanley E. Coutu v. Universities Rsch. Ass'n, Inc., 595 F.2d 396 (7th Cir. 1979). “This remedy seems inadequate *401 to assure the employees of a full recovery in the present case for three reasons: (1) it is based on the assumption that there are stipulations in the contract, (2) it provides for withholding payment only until the violations are discontinued…”

Int'l Bhd. Elec v. Farfield Co (3rd Cir. 2021). “5,” 29 C.F.R. § 5.9 (emphasis added), but the relevant statute calls only for contractual stipulations that there “may be withheld -45- from the contractor so much of the accrued payments as the contracting officer considers necessary” to pay the required wages.”

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