The Service Contract Labor Standards (SCLS), formerly known as the Service Contract Act (SCA), covers contracts entered into by Federal and District of Columbia agencies wherein the contract’s principal purpose is to furnish services in the U.S. through the use of “service employees”. Generally speaking, it mostly applies to hourly or “non-exempt” personnel. See: Wage Determination
Who are Service Employees?
According to Part 541 of Title 29, Code of Federal Regulations, “service employees” means any person engaged in the performance of a contract other than any person employed in a bona fide executive, administrative, or professional capacity. This includes all such persons regardless of any contractual relationship that may be alleged to exist between a Contractor of Subcontractor and such persons.
Contracts, including the GSA Schedule contract, are subject to all applicable provisions of 41 U.S.C. chapter 67, Service Contract Labor Standards, and regulations of the Secretary of Labor (29 CFR Part 4). The SCLS requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the minimum monetary wages and shall be furnished fringe benefits (the “health and welfare” element) in accordance with the wages and fringe benefits determined by the Secretary of Labor, or authorized representative, as specified in any wage determination attached to the contract.
You can find your latest Wage determination outlining minimum wage per category, Holiday & Vacation requirement, and Health & Welfare rates at https://beta.sam.gov/. Use the dropdown to identify “Wage Determination” and type your county or place of performance to find current WDOL guidelines.
Finally, employers must notify employees working in connection with the contract of the compensation due them under the wage and fringe benefits provisions of the contract. Additional information is available at the Department of Labor, Wage and Hour Division website. For compliance assistance or more information about the SCLC, go to the McNamara-O’Hara Service Contract Act (SCA) in the Department of Labor website.
Please contact your Coley Government Contract team for further information or to update your GSA Schedule Contract to reflect the latest SCLS wage determination rates and health and welfare payments.
Vice President for Coley GCS, LLC, a Government Contracts Consulting, Coaching and Training company. Daniel leads the day-to-day operations of Coley’s consulting practice. He has two decades of experience with the acquisition, management, and marketing of Federal, State, and Local government contracts. Daniel specializes in all aspects of GSA Schedules management and marketing and has helped hundreds of Coley clients remain compliant with the terms of their GSA contract while helping them expand their business.