SERVICE CONTRACT ACT WAGE DETERMINATIONS

U.S. DEPARTMENT OF LABOR

SCA RESOURCE BOOK 11/2002

SCA WAGE DETERMINATIONS

SERVICE CONTRACT ACT

WAGE DETERMINATIONS

U.S. DEPARTMENT OF LABOR

SCA RESOURCE BOOK 11/2002

SCA WAGE DETERMINATIONS

SERVICE CONTRACT ACT, as amended (excerpt)

SERVICE CONTRACT ACT WAGE DETERMINATIONS

REQUESTING SCA WAGE DETERMINATIONS

GUIDE TO COMPLETING AN INDIVIDUAL

SF-98 REQUEST

SAMPLE CONSOLIDATED SCA WAGE

DETERMINATION

SAMPLE SF-98 AND SF-98a REQUEST FOR AN SCA

WAGE DETERMINATION

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U.S. DEPARTMENT OF LABOR

SCA RESOURCE BOOK 11/2002

SCA WAGE DETERMINATIONS

SERVICE CONTRACT ACT, as amended (excerpt)

¡°Sec. 2(a) Every contract (and any bid specification therefor) entered

into by the United States or the District of Columbia in excess of $2,500,

... whether negotiated or advertised, the principal purpose of which is to

furnish services in the United States through the use of service employees

shall contain the following:

(1) A provision specifying the minimum monetary wages to be paid

the various classes of services employees in the performance of

the contract or any subcontract thereunder, as determined by the

Secretary [of Labor], or her authorized representative, in

accordance with prevailing rates for such employees in the

locality or where a collective bargaining agreement covers any

such service employees, in accordance with the rates for such

employees provided for in such agreement, including prospective

wage increases provided for in such agreement as a result of

arm's-length negotiations.

(2) A provision specifying the fringe benefits to be furnished the

various classes of service employees....

Sec. 4 ... (c) No contractor or subcontractor under a contract, which

succeeds a contract subject to this Act under and which substantially the

same services are furnished, shall pay any service employee under such

contract less than the wages and fringe benefits, including accrued wages

and fringe benefits, and any prospective increases in wages and fringe

benefits provided for in a collective-bargaining agreement as a result of

arm's-length negotiations, to which such service employees would have

been entitled if they were employed under the predecessor contract:

Provided, that in any of the foregoing circumstances such obligations

shall not apply if the Secretary finds after a hearing ... that such wages

and fringe benefits are substantially at variance with those which prevail

for services of a character similar in the locality.¡± (Emphases added.)

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U.S. DEPARTMENT OF LABOR

SCA RESOURCE BOOK 11/2002

SCA WAGE DETERMINATIONS

SERVICE CONTRACT ACT WAGE DETERMINATIONS

A. SCA wage determination requirements

¡À The SCA wage determination (WD) sets the minimum wages and fringe benefits

that contractors and their subcontractors must pay service employees working on

covered contracts.

¡À¡À Wages are defined as monetary compensation provided to employees. They

are usually listed in the wage determination as hourly wage rates.

¡À¡À Fringe benefits are defined in section 2(a)(2) of the Act as follows:

¡°Such fringe benefits shall include medical or hospital care, pensions on

retirement or death, compensation for injuries or illness resulting from

occupational activity, or insurance to provide any of the foregoing,

unemployment benefits, life insurance, disability and sickness insurance,

accident insurance, vacation and holiday pay, costs of apprenticeship or

other similar programs and other bona fide fringe benefits not otherwise

required by federal, state, or local law to be provided by the contractor or

subcontractor.¡±

The various fringe benefits listed in the Act are illustrative of those which

may be included in the WD. Which fringe benefits are included in the WD

depends upon the type of WD to be issued and the evaluation of source data

used to develop the WD. Fringe benefits may be provided as monetary

compensation (cash payments) in lieu of providing the listed benefits,

provided certain records are kept.

¡À¡À Most WD's are revised periodically, as new health and welfare benefits or

wage survey data become available. However, if a WD is properly included

in the contract at the time of award, the contract does not need to be modified

to include subsequent revisions to the WD prior to completion of the first

year of the contract.

¡À Section 10 of the Act requires the Department of Labor to issue a WD for every

service contract employing more than five service employees.

¡À¡À If the contract requires five or fewer service employees, the contracting

agency must still request a WD, and if one is issued, include the applicable

WD in the contract. There is a common misconception among contracting

officers that they need not submit a request if there will be five or fewer

service employees performing on the contract. This has never been the

case. The contracting agency must request a WD even if only one service

employee will be employed on the contract, but the Wage and Hour

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U.S. DEPARTMENT OF LABOR

SCA RESOURCE BOOK 11/2002

SCA WAGE DETERMINATIONS

Division (WH) has the option of not issuing a WD for contracts with five

or fewer service employees.

¡À¡À If no WD has been issued for a service contract involving five or fewer

service employees, the contractor can pay no less than the minimum wage

required by section 6(a)(1) of Fair Labor Standards Act. If the contract

involves more than five service employees, the contract must contain a WD.

However, we have over 204 wage determinations with each containing over

300 classifications. It would be a rare occurrence if the Department of Labor

had not issued a wage determination for a geographic area.

B. SCA wage determinations format

¡À In 1994, WH began to issue SCA wage determinations in a revised format that

includes nearly all standard occupations on a single wage determination. In the

past, wage determinations were issued that only covered classes in broad

occupational groupings. This format, generally referred to as the consolidated

wage determination, reduces the need for Service Contract Act (SCA)

conformance actions, and improves service to SCA wage determinations

customers.

¡À Currently there are 204 areas for which consolidated wage determinations are

being issued.

C. Two bases on which SCA WD's are issued:

1.

Prevailing in the locality. Determinations that set forth minimum monetary wage

and fringe benefits determined to be prevailing for various classes of service

employees in the locality after giving ¡°due consideration¡± to the rates applicable

to such service employees if directly hired by the Federal Government. (Sections

2(a)(1), 2(a)(2), and 2(a)(5) of the Act); and

¡À Wage rates and fringe benefits prevailing in the locality (29 CFR 4.51):

¡À¡À Rates based on surveys and rates based on union dominance. These

determinations are usually based on data collected by the Bureau of Labor

Statistics (BLS) under the National Compensation and Occupational

Employment Statistics Surveys.

¡À¡À Union Dominance. The SCA regulations provide that ¡°where a single rate is

paid to a majority (50 percent or more) of the workers in a class of service

employees engaged in similar work in a particular locality, that rate is

determined to prevail¡±. 29 CFR 4.51(b). These majority rate prevailing

wage determinations are typically called union dominance wage

determinations.

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