B. Service Contract Act: Regulations and Requirements
- SCA - Statute and Regulations. The WDOL.GOV Library Page contains a link to DOL's website and to a copy of the statute (41 U.S.C. 351-358) and the pertinent SCA regulations (Title 29 CFR Part 4, Labor Standards for Federal Service Contracts). Other DOL regulations address related requirements, for example: Title 29 CFR Part 541 for the definition of the exemption for "executive, administrative, or professional employees"; Title 29 CFR Part 785 for regulations defining "hours worked"; Title 29 CFR Part 531 for regulations defining "wages"; and Title 29 CFR Part 778 for regulations defining overtime or premium pay for workers working in excess of a standard workweek.
- Federal Acquisition Regulations (FAR) and Supplements. The WDOL.GOV Library Page contains links to federal acquisition regulations including the supplements issued by each federal contracting agency. WDOL.GOV users are urged to familiarize themselves not only with DOL regulations, but also with the pertinent acquisition regulations pertaining to specific contract actions (including statements of work, modifications to the contract, options, extensions, and similar actions).
- Application of SCA. SCA establishes standards for prevailing compensation and safety and health protections for employees performing work for contractors and subcontractors on service contracts entered into with the federal government and with the District of Columbia. SCA provisions are applicable to contracts the principal purpose of which is to provide services in the United States through the use of service employees.
- SCA Wage and Benefit Requirements
- a. For service contracts , SCA Section 2(b)(1) requires payment of the minimum wage in the Fair Labor Standards Act (reference FAR Section 22.1002-4).
- b. For service contracts , SCA requires the contracting officer to incorporate into the contract a requirement to pay prevailing wages and benefits issued by DOL in the form of "wage determinations" (reference FAR Sections 22.1006, 22.1007 & 22.1008).
- Types of SCA WDs. The WDOL.GOV database contains the latest WDs developed by the DOL. The SCA database is updated each Tuesday (by 1:00 pm ET) with all current revisions. DOL issues two types of SCA WDs - prevailing wage WDs, and WDs based on Collective Bargaining Agreements (CBAs) covered by SCA Section 4(c).
Wage SCA WDs. There are several sub-types of "prevailing" WDs as follows:
- Standard WDs are generic WDs listing over 300 different classifications (from several occupational groups, e.g., Clerical and Administrative, Technical Occupations, Information and Arts, Transportation). Each Standard WD reflects wages and fringe benefits found by DOL to be prevailing in a specific locality1 . The wage rates and health and welfare (H&W) rates are the same on each Standard WD for a locality. However, the method by which a contractor must comply with the H&W rate is different2. Compliance with the H&W rate on all "odd numbered" Standard WDs (i.e., WD No. 2005-2103 or WD No. 2005-2113) requires payment of the minimum H&W rate for each hour paid for each employee, up to a maximum of 40 hours per week. [See 29 CFR 4.175(a)] Compliance with the H&W rate on all "even numbered" Standard WDs (i.e., WD No. 2005-2104 or WD No. 2005-2114) requires the contractor to contribute an average of the stated H&W rate per hour, computed on the basis of all hours worked by service employees on the contract. [See 29 CFR 4.175(b)] The latter method, "average cost H&W", was specified on WDs with the old "high benefit" rate that was grandfathered as part of the 1996 DOL rulemaking. (See "All Agency Memorandum No. 188" dated May 22, 1997 on the WDOL.gov Library Page and 29 CFR 4.52(d)). When the survey data for odd numbered ("per employee") WD exceeded the grandfathered "high benefit" rate of $2.56 per hour, the Department of Labor increased the fringe benefit rates on all WDs to reflect the new survey data; however, DOL also retained the two different methods for determining compliance. The averaging H&W methodology continued to be applied to contracts for which the old $2.56 high benefit rate had been applicable (see AAM No. 196 on the WDOL.gov Library Page).
When selecting a Standard WD,
the contracting officer must select the Standard WD with the appropriate
health and welfare method. The guidelines for selection are as follows:
- First Guideline: Were the services previously performed under a contract that incorporated an even numbered Standard WD? If so, for all following contract periods and follow-on contracts for substantially the same services that will be performed in the same locality, select the even numbered Standard WD for that same locality. [Reference -- 29 CFR 4.52(d)] When following the current WD selection menu, this is the reason for the question regarding whether the services were "performed under an SCA wage determination that ends in an even number".
- Second Guideline: If the services were not previously performed under contract using an even numbered Standard WD, or if the services were not previously performed under an SCA-covered contract, then select the odd numbered Standard WD for that locality. When following the current WD selection menu, answering the menu questions correct should obtain the odd numbered WD response.
Because Hawaii state law requires the payment of health insurance, SCA H&W rates are different in Hawaii, but the application of the two levels is the same as noted in the above paragraphs.
- WDOL.gov "Selecting SCA WDs" process asks the user to identify if the services were previously performed at the locality in an SCA-covered contract, and if in the preceding contract or contract period the Standard WD was odd or even numbered. Therefore, it is necessary to know the WD "history" of a service contract requirement, even if the contract was awarded or administered by a different contracting activity, including those that will be awarded by a different government agency. If you have any questions regarding the appropriate H&W level to select for a specific contract action, contact the contracting officer or the designated agency labor advisor for assistance.
- Non-Standard WDs. Non-Standard
WDs are issued by DOL to reflect prevailing wages and
benefits in specific service industries in designated
localities. Non-Standard WDs may not be used in contracts
for services other than those specified in the Non-Standard
WD description; conversely, Standard WDs may not be
used in contracts designated for Non-Standard WDs.
In the WDOL.GOV Program selection process, the user
will be asked to determine if the contract services
are "non-standard" as designated by DOL. The menu will
provide a drop-down listing of such designated Non-Standard
services. The WDOL.GOV User's Guide provides a listing
of non-standard services at "Appendix
A, SCA Non-Standard WDs".
- Contract-Specific or
Special SCA WDs. There are a few, unique service contracts where DOL will issue contract-specific wage and benefit rates under SCA. An example of a contract-specific WD is a sole-source contract with a county, state or municipality where wages and benefits are already established. The SCA WD applicable to such a contract will be the rates established by the sole-source contractor. (Not all sole-source contract actions are subject to a Contract-Specific WD; only those contracts awarded to contractors similar to government organizations.) If a contracting officer has determined that neither a Standard WD nor a Non-Standard WD is appropriate for a particular contract action, the contracting officer should request an appropriate contract specific or special WD from DOL using the e98 system. DOL has sole authority to determine the appropriate wage and benefit rates for each contract action and will either issue a WD reflecting such rates or notify the contracting agency that there is no wage determination applicable to the contract.
- SCA WDs Based on Collective Bargaining Agreements (CBAs)
- If a fully executed Collective Bargaining Agreement (CBA) has been established as the predecessor contractor's Collective Bargaining Agreement (CBA) as specified in 29 CFR 4.163(f) and that Collective Bargaining Agreement (CBA) is timely [see section 8 of this guide] received by the contracting officer, the contracting officer must prepare a Collective Bargaining Agreement (CBA) WD that references the Collective Bargaining Agreement (CBA) (by employer, union, contract number and effective dates) and incorporate into the successor contract action the Collective Bargaining Agreement (CBA) (complete copy of the Collective Bargaining Agreement (CBA) and all addenda) along with the Collective Bargaining Agreement (CBA) WD as a cover page. The Collective Bargaining Agreement (CBA) wage and benefit provisions become controlling for wage determination purposes under section 4(c) of the SCA. 29 CFR 4.163(f) states in pertinent part". 4(c) will be operative only if the employees who worked on the predecessor contract were actually paid in accordance with the wage and fringe benefit provisions of a predecessor contractor's collective bargaining agreement. Thus, for example, section 4(c) would not apply if the predecessor contractor entered into a collective bargaining agreement for the first time, which did not become effective until after the expiration of the predecessor contract." Furthermore, DOL All Agency Memorandum 159 provides that Collective Bargaining Agreement (CBA)s that contain prohibited contingencies will not be effective for section 4(c) purposes. Therefore, it is recommended that the Collective Bargaining Agreement (CBA) be carefully reviewed to determine if it should be effective for wage determination purposes under section 4(c) prior to utilization of the WDOL process for creating a Collective Bargaining Agreement (CBA)-based wage determination. Thus the Collective Bargaining Agreement (CBA) should be reviewed for (1) timeliness, (2) that it is properly signed & executed by both parties to the Collective Bargaining Agreement (CBA), (3) that it has been properly established as the predecessor contractor's Collective Bargaining Agreement (CBA) under which service employees were paid in the prior period of contract performance, (4) that it does not contain prohibited contingencies per DOL's AAM #159, (5) and that it has been reviewed for possible "variance" under FAR 22.1013 & 22.1021. Lastly, it is important to note that a contractor may be both the predecessor contractor and the successor contractor for wage determination purposes, particularly where option periods and extensions are issued. It is not necessary to send a copy of the Collective Bargaining Agreement (CBA) to DOL. The WDOL.gov database will not contain a copy of the Collective Bargaining Agreement (CBA) itself; it will only retain copies of the cover Collective Bargaining Agreement (CBA) WDs. Contractors and other WDOL.gov users must review specific solicitations or contracts (or contact the contracting officer) in order to determine if a particular Collective Bargaining Agreement (CBA) is applicable under SCA to that action.
- The WDOL.gov Program menu includes a form for
the contracting officer to complete in order to prepare
the cover Collective Bargaining Agreement (CBA) WD for each specific contract action,
as required by SCA. The contracting officer must prepare
a separate Collective Bargaining Agreement (CBA) WD for each SCA-covered Collective Bargaining Agreement (CBA) applicable
to a contract action (including separate Collective Bargaining Agreement (CBA) WDs for
prime contractor and for subcontractor(s)).
- Monitoring the WDOL Program for
SCA WD Revisions.
- Effective SCA WD revisions are
those WDs considered received timely by
the contracting agency. See Section 7 of this guide for the timeliness criteria.
- Effective SCA WDs are
required to be incorporated into contracts or contract actions. That date will be found as a header at the top of the WD obtained via WDOL.
- Under the WDOL.GOV Program, "receipt" date of a new
or revised SCA WD is the first date at which that WD appears
on the WDOL.GOV Program SCA Database.
- Under the WDOL Program, DOL will publish all SCA WD
revisions for a given week on the WDOL.GOV Program database
- The contracting officer must monitor the WDOL.GOV Program
SCA Database regularly to determine if a selected WD has
been revised and may be applicable (timely) to the contract
ALERT SYSTEM. To ensure that the contracting officer
(or other interested party) is aware of revisions made
by DOL to SCA WDs (Standard WDs and Non-Standard WDs) selected
for a specific contract action, the WDOL.GOV user may register
for automatic email notification of such revisions. Upon
selection of an appropriate SCA Standard or Non-Standard
WD, the user will be offered the opportunity to request
email notice of future revisions for a specific period
of time, or until a specific date. Contracting officers
are encouraged to request this automatic notification process
in order to be aware of timely revisions applicable to
- At the Alert Service menu, the user will
be asked to provide an email address for the WDOL.gov
to use in providing notification of a revision
to a WD. The user may also provide an "alert identifier" which
will appear in the WDOL.gov notification and will
assist the user in relating the newly revised WD
to a specific contract or solicitation, or other
area of interest.
- Users requesting the Alert Service will receive
an email notice each time the selected SCA WD is
revised until the Alert Service request expires.
CAUTION: The Alert Service does not relieve the
contracting officer of the obligation under SCA
and its regulations to use timely received new
or revised SCA WDs in contract actions.
- Archived SCA WDs. Once
DOL revises an SCA WD, the most current revision will be
published on the WDOL.GOV database. Prior revisions, no longer
current, will be maintained in the "Archived SCA WD" database
for information purposes only. Contracting officers should
not use an archived WD in a contract action without prior
approval of DOL. Contact DOL at telephone number 866-487-9423.
- Timely Receipt of New or Revised SCA
WDs (Title 29 CFR Part 4, Section 4.5 and FAR Section 22.1012).
- For contract actions resulting
from other than sealed bidding:
- A revised SCA WD shall be effective if it is
received by the contracting agency before
date of award (or date of modification for an
option or extension).
- If a revised WD is received after award, it shall
NOT be effective if contract performance starts less
than 30 days from date of award or modification.
- If a revised WD is received after award and performance
starts more than 30 days from
award or modification date, the WD (or Collective Bargaining Agreement (CBA))
will be effective if received no later than 10 days
prior to start of performance.
- With reference to SCA-covered Collective Bargaining Agreement (CBA)s, the contracting
officer must provide written notification to unions
and contractors (in accordance with Title 29, CFR Part
4, Section 4.1b(b)(3), and FAR Section 22.1010) of
the pending contract action and estimated date. A sample
letter for notification is provided at WDOL.GOV User's
Guide, Appendix B, FAR 22.1010
- For contract actions resulting
from sealed bidding:
- A revised SCA WD shall NOT be effective if received
by the contracting agency less
than 10 days prior to opening of bids, unless
there is sufficient time to amend the solicitation
and incorporate the revised WD.
- Timely receipt
of Collective Bargaining Agreement (CBA)s (Title 29 CFR Part 4, Section 4.1(b) and FAR Section
- The obligation of a successor contractor to pay its
employees no less than the wages and fringe benefits required
under the predecessor contractor's Collective Bargaining Agreement (CBA) is a statutory requirement
of SCA Section 4(c). DOL has applied a limitation on the
self-executing aspects of Section 4(c) (reference Title 29
CFR Part 4, Section 4.1(b)). This limitation only applies,
however, if the contracting officer has given both the incumbent
(predecessor) contractor and the employees' collective bargaining
representative written notification at least 30 days in advance
of all estimated procurement dates. A sample letter for notification
is provided at Appendix B, "FAR Section 22.1010 Notification".
- For contract actions resulting from other than sealed
- A revised Collective Bargaining Agreement (CBA) shall apply to the successor contract
if it is received by the contracting agency before
the date of award (or date of modification for an option
- If a Collective Bargaining Agreement (CBA) is received after award, it shall NOT
apply to the successor contract if contract performance
starts less than 30 days from date of award or modification.
- If a Collective Bargaining Agreement (CBA) is received after award and performance
starts more than 30 days from award or modification
date, the Collective Bargaining Agreement (CBA) shall apply to the successor contract
if received no later than 10 days prior to start of
- For contract actions resulting from sealed bidding:
- A revised Collective Bargaining Agreement (CBA) shall NOT apply to the successor
contract if received by the contracting agency less
than 10 days prior to opening of bids, unless there
is sufficient time to amend the solicitation and incorporate
the revised WD.
- Conformances (Requesting Authorization
of Additional Classification and Rate). DOL issues WDs
under SCA using available statistical data on prevailing wages
and benefits in a locality. On occasion, the WD does not provide
a rate for a particular occupation needed in the performance
of the contract. Because of this, SCA provisions contain a conformance
procedure for the purpose of establishing a SCA-enforceable wage
and benefit rate for missing occupational classifications.
- Contractors are responsible for determining that the
employees performing work on a contract are in fact performing
duties that fall within one or more of the occupational classifications
listed on the applicable SCA WD. If a classification considered
necessary for performance of the work is missing from the
WD applicable to the contract, the awarded contractor must
initiate a request for approval of a proposed wage and benefit
rate. Generally, the contractor initiates the request by
preparing an SF-1444, Request for Authorization
of Additional Classification and Rate, at the time of
employment of the unlisted classification. (Reference Title
29 CFR Part 4, Section 4.6(b) and FAR 22.1019) The contractor
completes blocks 2 through 15 on the form. Requests may be
submitted without the form, but must contain the required
- Contractors must request employees, if present, or their designated representative, to sign block 16 noting the employee's concurrence or disagreement with the contractor's proposed wage and benefit rate. A statement supporting a recommendation for different rates may accompany any indication of disagreement. The "designated representative" is generally a union representative; it cannot be the contractor's representative or personnel officer.
- The contractor submits the completed SF-1444 to the
contracting officer. The contracting
officer reviews the form for completeness, and signs
the agency's concurrence or disagreement with the contractor's
proposal. A statement supporting a recommendation for different
rates may accompany any indication of disagreement.
- The contracting officer then submits the request to DOL for approval. The contractor must pay the proposed wage and benefit rate pending response from DOL. When DOL responds to the contracting officer, the contracting officer provides a copy of the response to the contractor with instructions to provide each employee a copy or to post it in the work area (with the applicable WD). The prime contractor must provide a copy of the determination to subcontractor(s), if any, that may employ workers in the conformed classification under the contract. If DOL responds with an approved rate that is higher than the rate proposed by the contractor, the contractor and/or subcontractor(s) must pay such rate retroactive to the start of performance of that classification.
- DOL's Service Contract
Act Conformance Guide provides further guidance on
“1“ If the user knows the city where the work will be performed, but needs help in identifying the county in which that city is located, the web sites for the U.S. Geological Survey (USGS) and the National Association of Counties (NACO) provide tools that may be used to identify the county.
“2"SCA Health and Welfare (H&W) Rates. On June 1, 1997, DOL initiated a new methodology to determine an appropriate, single SCA H&W benefit rate for SCA Standard WDs. The new, lower rate, listed on the odd-numbered SCA WDs (i.e., 1994-2103, or 1994-2113), was originally established at $1.91 per hour, to be revised in stages over several years (each increase to be published annually on June 1st). DOL continued to publish the SCA Standard WDs, even-numbered (i.e., 1994-2104 or 1994-2114), listing the pre-existing, higher H&W rate of $2.56 per hour until the lower H&W rate reached or exceeded the $2.56 per hour. The old rate listed on the even-numbered Standard WDs continued to be applicable to certain contract actions in accordance with DOL's "All Agency Memorandum #188" published in the Federal Register on December 30, 1996 (page 68647). DOL will continue to increase both Standard WD H&W rates while completing a study to determine the appropriate application of the new methodology adopted in 1997. Following the guidance in the Users Guide and the "Selecting SCA WDs" on WDOL.gov will assist the user in obtaining the appropriate WD for specific contract actions."