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FAR and DFARS › FAR Part 31: Contract Cost Principles and Procedures › Subpart 31.2

FAR 31.205-21 Labor relations costs.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section explains which labor relations costs a contractor can charge to the government. Costs of maintaining good relations with employees, such as shop stewards and employee publications, are generally allowable, but costs of trying to persuade employees about union organizing or collective bargaining are not. This matters because claiming unallowable persuasion costs could lead to them being disallowed.

Applies to: Contractors incurring labor relations costs on government contracts

Key terms: allowable · unallowable · labor relations costs · collectively bargain · Executive Order 13494

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) Costs incurred in maintaining satisfactory relations between the contractor and its employees (other than those made unallowable in paragraph (b) of this section), including costs of shop stewards, labor management committees, employee publications, and other related activities, are allowable.

(b) As required by Executive Order 13494, Economy in Government Contracting, costs of any activities undertaken to persuade employees, of any entity, to exercise or not to exercise, or concerning the manner of exercising, the right to organize and bargain collectively through representatives of the employees' own choosing are unallowable. Examples of unallowable costs under this paragraph include, but are not limited to, the costs of—

(1) Preparing and distributing materials;

(2) Hiring or consulting legal counsel or consultants;

(3) Meetings (including paying the salaries of the attendees at meetings held for this purpose); and

(4) Planning or conducting activities by managers, supervisors, or union representatives during work hours.

← 31.205-20 Interest and other financial costs. · 31.205-22 Lobbying and political activity costs. →

Rule changes for FAR Part 31

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 31.205-21 Labor relations costs · SpendQuery