CWHSSA Overtime and Liquidated Damages: The $33-Per-Day Rule, the Withholding Machinery, and the Records That Answer 29 CFR 5.5(b)

CWHSSA Overtime and Liquidated Damages: The $33-Per-Day Rule, the Withholding Machinery, and the Records That Answer 29 CFR 5.5(b)

For contracts exceeding $100,000 that are subject to the Contract Work Hours and Safety Standards Act (CWHSSA) overtime provisions, 29 CFR 5.5(b) requires contract clauses addressing overtime, liquidated damages, withholding, subcontractor responsibility, and anti-retaliation. Contractors and responsible subcontractors face liability for unpaid overtime wages and interest, plus liquidated damages of $33 per worker for each calendar day the worker was required or permitted to work over 40 hours in a workweek without required overtime pay. Records should connect weekly hours and pay calculations to the contract, payroll, any withholding action, and the response taken.

Requirements at a glance

How the $33-per-day calculation works

The CWHSSA clause requires overtime pay at not less than one and one-half times the basic rate for all hours over 40 in a workweek. When required overtime wages are not paid, the contractor and responsible subcontractor are liable for the unpaid wages and interest from the date of underpayment. Liquidated damages are additional.

The $33 amount is assessed for each individual worker and each calendar day on which that worker was required or permitted to work beyond the 40-hour workweek standard without the required overtime wages. The measure is a calendar day, not an hour of overtime. The rule covers watchpersons and guards as well as other laborers and mechanics.

For example, if a worker worked over 40 hours and was not paid required overtime for two qualifying calendar days, the regulation's calculation for that individual is $66 in liquidated damages, in addition to the wage and interest liability. This example illustrates the calculation only; the underlying hours, workweek, and payment facts must be established from records.

The $33 amount appears in the regulation as amended, including updates published at 89 FR 1815 and 90 FR 1859. Confirm the current regulation when applying the rate to a particular contract or review period.

How withholding can reach contract funds

Under 29 CFR 5.5(b)(3)(i), the Federal agency or recipient of Federal assistance may withhold accrued payments or advances on its own action. It must withhold or cause withholding upon written request from an authorized representative of the U.S. Department of Labor. The amount is limited to what is considered necessary to satisfy specified liabilities, including unpaid wages, monetary relief with interest, and CWHSSA liquidated damages.

The withholding is not limited to the contract where the alleged violation occurred. Funds may be withheld under that contract, another Federal contract, or another federally assisted CWHSSA contract held by the same prime contractor. The other contract may have been awarded or assisted by a different agency. The provision gives DOL priority over specified claims to withheld funds, including claims by performance or payment bond sureties, an agency seeking reprocurement costs, bankruptcy trustees or estates, assignees, successors, and claims under the Prompt Payment Act.

The CWHSSA withholding provision should not be confused with the Davis-Bacon suspension process. Under 29 CFR 5.5(a)(2)(i), a separate Davis-Bacon provision authorizes suspension of further payments, advances, or guarantees of funds after written notice in specified circumstances, including certain failures to pay workers or submit required records. That express written-notice language is not the stated prerequisite for withholding under 5.5(b)(3)(i).

A contractor or subcontractor aggrieved by withholding of liquidated damages may appeal to the head of the responsible agency under 29 CFR 5.8(a). The regulation also sets a separate adjustment and relief process. For amounts over $500, an agency head may recommend adjustment or relief to the Secretary of Labor upon the required finding that the amount is incorrect or that the violation was inadvertent despite due care. The Administrator reviews the recommendation. For amounts of $500 or less, the agency head may adjust or grant relief without sending a recommendation to DOL, subject to the same specified findings. The $500 threshold concerns this adjustment process; it is not a general exemption from liability.

Practical controls for payroll and contract teams

Establish the contract scope. Maintain the contract and applicable clauses with a record of the contract amount, funding type, prime contractor, covered work, and relevant subcontracts. Confirm whether CWHSSA applies and whether Davis-Bacon or another referenced law also imposes payroll and recordkeeping requirements.

Verify overtime by worker and workweek. Reconcile time records, schedules, payroll, and contract assignments. Record daily hours and the weekly total used in the overtime calculation. Preserve the basic rate, applicable overtime rate, excess hours, wages due, wages paid, and any correction or interest calculation. Investigate differences between field timekeeping and payroll before finalizing weekly records.

Flow clauses down the tiers. The prime contractor must insert the CWHSSA clauses in subcontracts and require lower-tier inclusion. The prime remains responsible for lower-tier compliance. Maintain the applicable subcontract, clause version, subcontractor payroll submissions, exception follow-up, and resolution evidence.

Log each withholding event. Capture the affected contract, issuing agency or assistance recipient, amount withheld, stated liability, date and source of the agency's action, and any written DOL request received. Track related communications, reconciliations, payments, and release or adjustment decisions. Keep distinct records for CWHSSA withholding and any Davis-Bacon suspension notice.

Protect worker reporting. Section 5.5(b)(5) prohibits retaliation for specified worker activity, including reporting reasonably believed violations, filing or initiating proceedings, cooperating with investigations, testifying, or informing others of their rights. Provide a controlled channel for complaints and retain a restricted-access incident log documenting intake, preservation of relevant records, review steps, and actions taken. Limit access to personnel with a defined need.

Evidence-file checklist

Maintain a contract-specific file with the following records, as applicable:

• Contract, funding information, CWHSSA clauses, and subcontract flow-down evidence.
• Weekly worker-level calculation showing daily hours, workweek totals, applicable basic and overtime rates, wages due, wages paid, and corrections.
• Payroll records with worker identity, classification, rates, daily and weekly hours, deductions, and actual wages paid.
• For a contract subject only to CWHSSA, records containing the fields required by 29 CFR 5.5(c), maintained during the work and retained for three years after completion of all work on the prime contract.
• Withholding event log identifying the contract, agency action or written DOL request, amount, liability, and disposition.
• Appeal or adjustment record identifying the agency head, submission date, amount at issue, relevant $500 threshold, supporting findings, and decision.
• Restricted anti-retaliation incident log and related investigation records.

Where a contract is also subject to Davis-Bacon or another law referenced in 29 CFR 5.1, do not treat the standalone CWHSSA records clause as the complete recordkeeping standard. Review the additional requirements, including the applicable payroll submission and certification provisions in 29 CFR 5.5(a)(3).

For related federal contracting notice guidance, see the government contracting notices hub and the guide to notice record retention.

Sources and review

• 29 CFR 5.5, Contract provisions and related matters
• 29 CFR 5.8, Liquidated damages under CWHSSA
• 89 FR 1815
• 90 FR 1859

Author: Penny Dunkin, National Compliance Registry Review date: October 28, 2026

This article provides general compliance information, not legal advice.