Home > Major Acts of Congress > Walsh-Healey Public Contracts Act (1936)

Hether C. Macfarlane

On May 27, 1935 the U.S. Supreme Court declared the National Industrial Recovery Act (NIRA) unconstitutional. The Court's decision ended the first effort of the administration of Franklin D. Roosevelt to address the unemployment of nearly thirteen million American men and women caused by the Great Depression. Within a month, the Senate began considering a bill proposed by Secretary of Labor Frances Perkins to address the same problems on a much less sweeping scale, a proposal that became the Walsh-Healey Public Contracts Act (P.L. 74-846, 49 Stat. 2036).

The Walsh-Healey Act required that all contracts with any part of the U.S. government for goods or supplies worth at least $10,000 must state that:

1. the supplier was a manufacturer or regular dealer in the supplies;
2. all people employed in making or furnishing the supplies would be paid no less than what the Secretary of Labor had previously determined to be the "prevailing minimum wages for persons employed on similar work or in the particular or similar industries or groups of industries currently operating in the locality" where the supplies were made or furnished;
3. no one employed in making or furnishing the supplies would work more than eight hours a day or forty hours a week;
4. the business would not employ boys under sixteen, girls under eighteen, or prisoners; and
5. none of the work for the contract would be done under hazardous or unsanitary working conditions.

The act's provisions—the use of regular manufacturers or dealers rather than "bid brokers" who subcontracted to sweatshops; a minimum wage; the eight-hour day and forty-hour week; the elimination of child labor; and health and safety standards—were measures reformers had advocated for much of the twentieth century to address conditions created by industrialization. The wage and hour provisions were promoted as a means of decreasing unemployment and increasing the purchasing power of American workers.

The act's supporters believed employers would have to hire additional workers to keep their businesses working the same number of hours a week, thereby reducing the ranks of the unemployed. They also argued that requiring employers to pay the prevailing minimum wage would raise wages, allowing workers to purchase more goods from American businesses. The child and convict labor provisions similarly were designed to free those jobs for unemployed adults, as well as to protect children from exploitation.

Proponents of the bill argued that, because the federal government was required to accept the lowest bid for all its contracts, government agencies were often forced to contract with suppliers who paid insufficient wages, or who required workers to give "kickbacks" to cover employer expenses, or who required forty-four to sixty hours of work a week. Opponents noted that the bill defined neither "locality" nor "prevailing" and argued the bill was simply an attempt to reinstate the NIRA and again have the government, rather than the market, set wages. The proponents responded that the Walsh-Healey Act was different from the NIRA because the secretary of labor would not "set" wages but would instead determine the "prevailing" minimum wage that already existed in the industry and locality.

The constitutionality of the wage provision of the act was upheld by the Supreme Court in 1940 in Perkins v. Lukens Steel Company. The secretary of labor's power to determine the "locality" of the prevailing wage as either a regional or a national locality has also been upheld, although the locality determinations for numerous industries have been contested by business. The most significant amendment to the act since 1936 occurred in 1985 when the eight-hour limit was deleted, leaving suppliers free to pay employees for longer hours in a single day, so long as the total number of hours worked in a week remained at forty.

Despite the passage of the Fair Labor Standards Act in 1937, which mandated minimum wage and maximum hour standards for workers throughout the United States, the Walsh-Healey Public Contracts Act remains in force.

See also: CONTRACT DISPUTES ACT; NATIONAL INDUSTRIAL RECOVERY ACT; FAIR LABOR STANDARDS ACT; OCCUPATIONAL SAFETY & HEALTH ACT