FAR 52.222-16 Wage Approvals: What to Ask the Prime GC

By QuickBidSetup Editorial Team · Published October 31, 2026 · Sources linked below

On federal construction projects operating under cost-reimbursement arrangements, trade contractors must know exactly how craft labor gets approved and reimbursed. If your trade crew earns wages higher than the minimum rates published in the contract schedule, reimbursement is never automatic. Under FAR 52.222-16 Approval of Wage Rates, the government enforces strict submission and approval checkpoints before paying labor costs above the baseline scale. Estimators and subcontractors should address these exact questions with the general contractor before setting up payroll or mobilizing field crews.

Question 1: Does the Prime Contract Incorporate FAR 52.222-16?

Your first inquiry to the prime general contractor must establish whether the clause is part of the prime agreement and applicable subcontracts. Prescribed in FAR 22.407(b), the clause applies directly to straight time wage rates, as well as overtime rates based on those straight time amounts, for laborers and mechanics engaged in work under the contract. Knowing whether this provision is active determines whether your standard trade compensation plans require special federal clearance.

Question 2: Do Our Planned Hourly Rates Exceed the Minimum Wage Determination?

Before submitting hourly payroll projections, compare your actual craft labor pay against the project documents. Ask the general contractor to provide the applicable wage schedule referenced in the contract clauses. Contracting agency approval becomes mandatory if your proposed straight time pay exceeds the rates listed for corresponding work classifications in the applicable Construction Wage Rate Requirements minimum wage determination included in the contract.

To avoid unexpected audit issues, review these specific points with the prime contractor:

The exact job classifications listed on the contract wage determination for your trade scopes.
The published baseline rates for every laborer and mechanic classification assigned to your work package.
Whether your planned base straight time wage rates exceed those established figures.
How calculated overtime rates based on your straight time pay compare against the contract scale.

Question 3: Who Receives and Signs Off on the Written Wage Submission?

Approval cannot be handled verbally or informally at the jobsite trailer. Under FAR 52.222-16, all wage rates that exceed the minimum wage determination must be submitted for approval in writing. The rule specifies that approval must come directly from the head of the contracting activity or a representative expressly designated for that specific purpose. Subcontractors should ask the prime GC:

Has the head of the contracting activity expressly designated a representative in writing to review rate submissions?
What specific written format and documentation does the prime contractor require before passing trade wage tables to the government?
What timeline should your estimating and payroll teams expect before written approval is granted?

Question 4: Who Bears the Financial Cost if Excess Wages Are Disallowed?

A central financial risk in the clause governs wage amounts that lack agency endorsement. The clause plainly states that any amount paid by the contractor to any laborer or mechanic in excess of the agency-approved wage rate shall be at the expense of the contractor and shall not be reimbursed by the government. When working as a lower-tier trade contractor, ask the GC how this non-reimbursement rule flows down through subcontract language. If an unapproved wage premium is paid to a skilled mechanic, that excess cash comes out of the contractor's pocket rather than federal program funds.

Question 5: How Will Field Overtime Be Authorized and Compensated?

Project schedules frequently demand extra shifts, but overtime costs carry distinct rules under this clause. Subcontractors must ask the prime GC how overtime authorizations are processed with the government. If the government refuses to authorize the use of overtime, the contractor is still not released from the obligation to pay employees at the required overtime rates for any overtime actually worked. Clarify in advance whether the prime GC requires written agency sign-off prior to authorizing any overtime on site, because your firm remains legally obligated to pay craft workers their earned overtime even when federal reimbursement is denied.

Editor's follow-up — QuickBidSetup Estimating Desk (staff)

Keep in mind that wage approval under this clause assumes the work classification already appears in the contract. If your scope requires a trade specialty not listed in the contract wage determination, a different conformance process applies. Under FAR 22.406-3, the contractor must submit Standard Form (SF) 1444, Request for Authorization of Additional Classification and Rate, to the contracting officer. The contracting officer reviews whether the classification is utilized in the area and forwards the report to the Administrator of the Wage and Hour Division, who completes action within 30 days of receipt or requests more time. Approved workers must receive no less than the authorized rate dating back to their first day of work.

Sources

52.222-16 Approval of Wage Rates. | Acquisition.GOV

Published October 31, 2026. No affiliate links on this page. Facts come from the sources linked above; check them for updates.