SERVICECONTRACTACT.pdf

This is the Service Contract Act of 1965, as amended, a federal labor standards statute governing contractor-provided services to federal agencies.

The Act establishes mandatory wage and fringe benefit requirements for service contracts exceeding $2,500. Contractors must pay prevailing wages determined by the Secretary of Labor based on locality rates or applicable collective bargaining agreements, with a minimum floor of the Fair Labor Standards Act minimum wage. Fringe benefits must include medical or hospital care, pensions, occupational injury compensation, unemployment benefits, life insurance, disability and sickness insurance, accident insurance, vacation and holiday pay, and apprenticeship program costs. Contractors must deliver compensation notices to employees on the contract start date and ensure work is performed in sanitary, safe conditions free from hazards. The Act exempts construction contracts, Walsh-Healey covered work, certain transportation and utility services, radio/telegraph/cable services, and direct individual service contracts. Violations trigger wage withholding from contract payments, potential contract cancellation, and three-year debarment of violating contractors. The Secretary of Labor administers enforcement through wage determinations issued no less than every two years for covered service contracts. The statute applies to all contracts entered into ninety days after enactment, with phased implementation beginning with contracts employing more than twenty-five service employees in fiscal year 1973, decreasing to more than five employees by fiscal year 1977 and thereafter.