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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Greatest Hits - Federal Contractor Vacation and Sick Leave Rules

We’ve posted hundreds of blogs over the last six years. Looking back, three out of the top 10 posts are about Service Contract Act vacation rules. For a benefit that’s all about relaxation, it’s one of the most vexing SCA requirements—so much so that I believe they’re a poster child for the cliche that no good deed goes unpunished.

The Federal Enclave Doctrine – A Practical Guide to its Application

A federal enclave doctrine has emerged that precludes the application of state laws to those contracts, including state wage and hour laws, which are being performed in enclaves where only the federal government has exclusive jurisdiction. But the devil is in the details of figuring out if an enclave exists. This blog is meant to identify a process to make that determination.

Don’t Defund the Police – The Number of Wage & Hour Investigators Is Getting Too Low

The U.S. Department of Labor Wage & Hour Division has only about 720 investigators. Once upon a time it had over 1,000 investigators. This means that those who would cross the lines set for child labor, minimum wage, and overtime pay, along with noncompliance with Government contract wage laws, are less likely to be found or punished.

What Happened Here? DOL finds “Widespread Violations” of Government Contract Labor and Contract Violations

The Wage and Hour Division (“WHD”) of the US Department of Labor (“DOL”) announced last week that it recovered “$1.5 million dollars of back wages and damages for more than 400 workers” working for employers that had “federally funded” contracts. The announcement doesn’t convey the underlying cause of this multi-contractor compliance breakdown—the scale of which actually is extremely rare. I sure would like to know what happened here.

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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