The Contract clause at FAR 52.222.55 requires contractors to "make and maintain" payroll records for three years after completion of the work. We're not sure what "completion of the work" means. It could mean the completion of the contract but some have speculated that it could mean completion of the task or completion of the pay period for which the employee was paid. Whatever the case, payroll records must be maintained for at least three years after they are prepared.
The payroll records must include the following information:
- Name, address, and social security number
- Worker's occupation(s) or classification(s)
- The rate or rates of wages paid
- The number of daily and weekly hours worked by each worker
- Any deductions made, and
- Total wages paid.
Not only must contractors maintain such records but they must also make them available for inspection and transcription by Government representatives. Note this important requirement. FAR states "inspection and transcription". It does not require contractors provide copies of the records.
What happens if a contractor refuses to provide the Government access to its payroll records? FAR warns that failure to comply with the record production requirements shall be a violation of 29 CFR 10.26 and the contract. And, the contracting officer can act on his/her own to withhold payment until the noncompliance is corrected. The payment withhold provision is not discretionary. The clause states that the contracting officer (or the Administrator) shall withhold payment, though it doesn't specify the withhold amount. Presumably the withhold amount would cover the period for which payroll records have been requested.
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