Service Contract Act

The Service Contract Act has been a fixture of federal contracting requirements for over 50 years since its adoption in 1965. Broadly speaking, the SCA requires the payment of specified minimum wage rates and fringe benefits to employees working on service contracts in excess of $2,500 and subcontracts thereunder.

Sounds simple enough right? If you have a service contract, just provide the right amount of pay and provide benefits. In fact, it’s not that simple. Many questions arise.

Is your contract a service contract if it calls for the provision of both work and widgets? If your employees are service contract employees, are they governed by the SCA or exempt from its requirements? Are your fringe benefits “bona fide” fringe benefits? Is your contract governed by a wage determination? Which one? Are your employees properly paid under the correct classification under the wage determination? What should you do about classifications missing from the determination? How do collective bargaining agreements play into the equation? What about that predecessor contractor’s practices? Are you entitled to a price adjustment for increased costs? Did your contracting officer include the correct wage determination or grant you an accurate price adjustment? What impact do other laws such as the Davis-Bacon Act, the Contract Work Hours and Safety Standards Act, and the Fair Labor Standards Act have on your SCA compliance?

As you can see, the SCA is not simple at all. Many questions and problems can arise. It presents wage and hour issues, government contract quandaries, and often both. Your counsel needs to wear two hats.

Dan Abrahams, the head of AWR’s SCA practice, is perhaps the leading practitioner on the SCA and its requirements. He has written a number of articles, manuals, and even books on the SCA. He has counseled hundreds of organizations in compliance with the SCA’s requirements. He has represented clients in their response to Department of Labor investigations. He also has pursued claims seeking price adjustments to compensate for increased costs of compliance.

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The Ten Percent Man: Conformance of Team Leader Positions Under the Service Contract Act

There is an answer on how to conform a wage rate for team leaders under the Service Contract Act. You just how to know where to look. DOL suggests you pay them 110% of the journeyman rate.

The Truck Stops Here: DOL’s Enforcement Actions Against Fine Print

The US Department of Labor (“DOL”) announced actions it is taking to combat what it calls “coercive ‘fine print’ provisions” in employment agreements. One such action led to an injunction that barred a company from using its employment agreement to shift the cost of a wage and hour suit onto the very truck drivers who brought the claim. So, be advised—DOL is reading your fine print.

Heed the Lesson – Service Contractor Misses an Opportunity to Fix a Problem During Collective Bargaining.

A service contractor loses a pension tail liability claim, which with a little planning and a small change to their collective bargaining agreement ("CBA") may have been avoidable.

DOL Announces Federal Contractor Minimum Wage Rates for 2025

The US Department of Labor has issued its announcement of federal contractor minimum wage rates for 2025. For most nonexempt federal contractor employees, the new rate will be $17.75 per hour. However, contractors must review their wage rates across the board to make sure they're in compliance with the multiple minimum wage rates that could apply.

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AWR’s attorneys have:

  • Conducted proactive internal SCA audits to ascertain whether a company’s practices are proper under the SCA

  • Assisted clients in ascertaining whether and which wage determinations are applicable to their contracts

  • Represented firms in pursuing the correction of improper wage determinations

  • Defended organizations faced with an investigation or audit by the Department of Labor

  • Prepared claims for price adjustments and the litigation of appeals where price adjustments are improperly denied or insufficient

  • Negotiated the fair settlement of sanctions for alleged SCA violations

  • Won appeals seeking due compensation for SCA price adjustments