AF Labor Advisors: Service Contract Act
Published November 24, 2008
The McNamara-O'Hare Service Contract Act of 1965 (SCA) applies to all federal contracts where the principal purpose is to furnish services in the U.S. through the use of service employees (FAR 22.1003). Contracts that may exceed $2,500 must contain certain clauses (FAR 22.1006) regarding SCA requirements, and most SCA-covered contracts must also contain one or more wage determinations listing the minimum wage and fringe benefits rates to be paid to covered employees. Examples of covered services can be found at FAR 22.1005.
Remanufacturing consists of major overhaul and major modification -- primarily of aircraft engines, and is exempt from SCA if the criteria at FAR 22.1003-6 are met. Contracts involving remanufacturing and other requirements (such repair services and "routine" overhaul not qualifying as remanufacturing) must be reviewed on a case-by-case basis. Contact an Air Force Regional Labor Advisor for assistance.
Contracts with an individual or individuals are exempt under paragraph (f) of FAR 22.1003.3. Common usage involves Chapel-related services (Choir Director, Chapel Organist, Religious Education Coordinators), Financial Counselors, and others. Contracts with a contractor for such services are not exempt.
Other statutory and administrative exemptions are covered at FAR 22.1003-3 (statutory exemptions) and FAR 22.1003-4 (administrative exemptions).
The following clauses must be included in all fixed price contracts subject to SCA:
52.222-41: Service Contract act requirements;
52.222-42: Statement of Equivalent Rates for federal Hires
52.222-43: SCA and FLSA price Adjustment (option contracts)
The prescriptions for these and other SCA-related clauses are at FAR 22.1006
Visit our SCA Wage Determinations page for information about and access to SCA wage determinations.
Contract price adjustment may be authorized by FAR clause 52.222-43 following incorporation of a new or revised SCA wage determination at option and extension periods in fixed-price contracts. The Air Force Price Adjustment Guide (prepared by The Labor Advisors Office) is a comprehensive guide to assist in evaluation and processing of price adjustment actions.
The SCA Poster (DOL Publication WH-1313) is required to be furnished to the contractor at the time of award. It may no longer be in stock, but an electronic version is available from this link at the U.S. Department of Labor.
Conformance of Additional Classifications: Our SCA Desktop Guide provides detailed information regarding this requirement and the process. The SF1444 form (with instructions) is used for both SCA and DBA conformances.
SCA Enforcement: The U.S. Department of Labor (DOL) has sole enforcement authority for SCA violations. Therefore, complaints and suspected violations must be reported to the cognizant DOL District Office. Any complaints received from employees by contracting personnel should be treated as confidential and shall not be disclosed to the contractor and/or subcontractors (FAR 22.1024). This section also requires contracting agencies to cooperate with DOL investigators. Contract funds must be withheld upon DOL's request or under the Contracting Officer's own authority (FAR 22.1022) in order to protect back wages that may be due contractor employees.
Overtime requirements are not required under SCA, but by the Contract Work Hours and Safety Standards Act (FAR 22.3). In general, employees must receive payment at 1½ times the regular hourly wage rate for all hours worked in excess of 40 per week. "Comp time" is not generally permitted.
For additional information on Service Contract Act requirements, see our SCA Desktop Guide, FAR 22.10, or contact an Air Force Regional Labor Advisor.