The Copeland Anti-Kickback Act applies to employees on federally financed construction projects. Under the regulations issued by the Department of Labor at 5 C.F.R. Part 3, contractors and subcontractors are required to provide and swear to a weekly statement of the amount of wages paid to individual employees, affirming that no illegal kickbacks or rebates have been made – this can include unlawful deductions. Violations of the Act can result in fines up to $5,000.00, or up to five years in prison, or both. It covers all employees on construction projects, not just mechanics and laborers. Individuals, such as foremen or any person with authority over subordinates who can frustrate the objective of the Act, can be held liable for violations.
Permissible deductions under the Copeland Anti-Kickback Act include:
1. federal, state and local taxes;
2. bona fide prepayment of wages without discount;
3. court ordered deductions, such as garnishments;
4. amounts of voluntary participation in health insurance, annuities, etc.;
5. repayment of loans;
6. reasonable cost of board, lodging or other such facility; and
7. cost of safety equipment of nominal value.
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