SCA 2024 Training Program by Professional Services Council

SERVICE CONTRACT ACT

2024 TRAINING PROGRAM

November 13-14, 2024

Approved for 13.5 HRCI Credits

Section 1 4

Course Agenda

Course Objectives.....................................................................................................................

Instructor’s Biographies

Section 2....................................................................................................................................9

Introduction to the Service Contract Act – and Contractor Responsibilities

Section 3................................................................................................................................140

SCA WD 2015-4607 (Rev 9) (Autauga AL, Per-Person H&W)

SCA WD 2015-4282 (Rev 16) (Wash DC, Averaging H&W)......................................................

SCA WD 2017-0211 (Rev 8) Non-Standard Services WD (Fast-Food)......................................

SCA WD – 2018-11351 (Rev 1) CBA (example)

Section 4................................................................................................................................176

SF1444 – Request for Additional Classifications

WDOL Guidance on SCA Conformances ..................................................................................

Examples of Computations for Conformance Rates

Section 5................................................................................................................................185

Dept. of Labor All Agency Memo #230 on H&W

SCA Health & Welfare Rate – Reconciliation Examples ............................................................

Section 6

22.19.................................................................................................................................

.........................................................................................................................

DFARS 222-402-70...................................................................................................................

Presentation by Department of Defense and NASA Agency Labor Advisors

Provided separately

Section 9................................................................................................................................281

SCA Workshop 1A

SCA Workshop 1B.....................................................................................................................

SCA Workshop Solutions Provided separately

• Course Schedule

• Course Objectives

• Instructors’ Biographies

PSC Foundation Service Contract Act (SCA) Training Program

Schedule – November 13, 2024

7:30 a.m. Breakfast

8:00 – 8:15 a.m. Opening Remarks from PSC

8:15 – 10:00 a.m. SCA Coverage Contract and Individual Exemptions Procurement Agency Responsibilities

10:00 – 10:15 a.m. Break

10:15 a.m. – Noon Contractor Responsibilities Wage Determinations, Classifications, Conformances

Noon – 12:45 p.m. Break for Lunch

1:00 – 2:00 p.m. Lunch Presentation: Department of Labor Panel Discussion

2:00 – 2:15 p.m. Break

2:15 – 2:45 p.m. Wages, Hours Worked, Overtime Compensation

2:45 – 3:45 p m Fringe Benefits Panel

3:45 – 4:00 p.m. Questions & Answers

PSC Foundation Service Contract Act (SCA) Training Program

Schedule – November 14, 2024

7:30 a.m. Breakfast

8:00 – 8:45 a.m. Review and Workshop

8:45 – 9:45 a.m. Price Adjustments Panel

9:45 – 10:00 a.m. Break

10:00 – 11:00 a.m. SCA and Collective Bargaining Timeliness of New or Revised Wage Determinations or CBAs

11:00-Noon Covid-19 Complications

Contractor Minimum Wage Requirement Non-Displacement of Qualified Workers

Noon – 12:45 p.m. Break for Lunch

1:00 – 2:00 p.m. Lunch Presentation: Procurement Agency Labor Advisors Presentation

2:00 – 2:15 p.m. Break

2:15 – 3:15 p.m. Paid Sick Leave Requirements Contract Price Adjustments

3:15 – 4:00 p.m. Dept of Labor Enforcement Procedures ‘Corporate Culture’

4:00 – 4:15 p.m. Questions & Answers, Wrap-Up

THE MCNAMARA-O’HARA SERVICE CONTRACT ACT

An Introduction to the Statute and Contractor Responsibilities

Course Title: The McNamara-O’Hara Service Contract Act An Introduction to the Statute and Contractor Responsibilities

Length: Two days

Target Audience: Contractor personnel including contracts (offer preparations, contract administration), counsel, finance, human resources, payroll, project and site managers, and other related personnel

Subject Matter: McNamara-O’Hara Service Contract Act Davis-Bacon Act (brief overview as related to service contracting) Collective bargaining agreements under SCA Related Federal Acquisition Regulations and Clauses

Course Objectives: Understand labor standards applicable to each contract requirement and contract modification.

Understand and comply with wage determinations, including collective bargaining agreements, and recent regulatory changes such as the Contractor Minimum Wage and Paid Sick Leave requirements.

Ensure labor cost determinations used for contract offers, proposals, and negotiations are accurate and support successful competition and contract performance.

Understand and comply with wage determinations, including collective bargaining agreements

Respond appropriately to Department of Labor investigations.

Eric S. Crusius, Esq.

Holland & Knight LLP

1650 Tysons Boulevard, Suite 1700

Tysons, VA 22102

Phone 703.720.8042

Fax 703.720.8610

Mobile 516.314.1307

eric.crusius@hklaw.com

Eric Crusius is a government contracts and litigation attorney with Holland & Knight focusing on labor compliance issues for government contractors.

Over his career, Eric has handled a number of groundbreaking Service Contract Act compliance matters and cases before the Department of Labor focusing on compensation, benefits, and the new regulations promulgated by the Obama administration. Eric is also a frequent speaker on these issues, addressing the American Bar Association (ABA), the National Contract Management Association, and appearing on Government Matters, Federal News Radio and other media outlets. Further, Eric is co-chair of the ABA’s Employment Safety & Labor Committee and helped draft the ABA’s comments regarding the new sick leave regulations (as well as Fair Pay and Safe Workplaces).

Besides extensive experience with the Service Contract Act, Eric has wide-ranging experience in government contracts litigation, including successfully prosecuting and intervening in numerous bid protests before the U.S. Court of Federal Claims, Government Accountability Office (GAO), boards of contract appeals and other federal agencies. He counsels clients regarding trade agreements, export controls, subcontracting and teaming agreements, and compliance with the Federal Acquisition Regulation (FAR) Eric also represents contractors in investigations, suspension and debarment proceedings, and in federal and state courts.

Eric is also well-versed in developing strategies for and managing all stages of complex multimillion-dollar litigations from commencement through trial including prime/sub disputes.

Mr. Crusius’ recent representative matters include:

• Obtained a $3.3 million verdict in a complex government contracts trial against a multinational government contractor;

• Won jury trial, including punitive damages, on behalf of a government contractor in the U.S. District Court for the Eastern District of Virginia in a case involving the Computer Fraud and Abuse Act;

• Won an appeal in Ohio's Ninth District Court of Appeals overturning the summary judgment decision by the trial court; and

• Successfully prosecuted numerous bid protests at the GAO and the Court of Federal Claims, including a successful challenge of an approximately $190 million award on two separate protest grounds and a successful challenge of corrective action taken by the agency and prior adverse GAO decision

Eric is admitted to practice law in New York and Virginia and is admitted to numerous federal courts including the United States Court of Federal Claims and the United States Supreme Court.

• Introduction to the Service Contract Act – and Contractor Responsibilities

(FARSubpart22.10–ServiceContractLaborStandards)

AnIntroductiontothestatute,regulations,andcontract clauses

WhatContractorsShouldKnow

•HowdoesSCAapplytocontractsandworkers(coverage)

•Whatcontractsandworkersareexempt?

•Includingindividualexemptions(29CFR541)

•Whoisresponsiblefordeterminingcoverage?

•Whoisresponsiblefordeterminingexemptions?

WhatContractorsShouldKnow

•Wagedeterminations(includingcollectivebargainingagreements)

•Classifications,mapping,conformances

•Wages,benefits,overtimecompensation

•Contractpricingandpost-awardpriceadjustments

•Recentexecutiveordersonservicecontracts

SCAIntroduction

ServiceContractLaborStandards (41U.S.C.chapter67)

•Providesprevailingwagesandbenefitsforworkersonfederalservice contracts

•“determined”bytheDept.ofLabor

•SimilartoDavis-BaconAct(construction)andWalsh-Healey(supply)

•TwoSCAamendmentsthusfar:

•1972:protectedcollectivebargainingagreements;requiredthatDOLissueWDs

•1976:defined“serviceemployee”

•Appliestocontracts... “...theprincipalpurposeofwhichistoprovideservices...in theUS...throughtheuseof“serviceemployees...”

•“Principalpurpose”–asimplemajorityofcontract requirements

>50%ofcontracteffort(FTEsand/orvalue)

“...intheUS...”

•“IntheUS”means...

•Inthe50states,DistrictofColumbia,PuertoRico,Virgin Islands,OuterContinentalShelf,AmericanSamoa,Guam, WakeIsland,JohnstonIsland,NorthernMarianas

•Anyportionofacontractprincipallyforservicesthat isperformedintheUSiscovered

WhatDoestheSCARequire?

•WagesinaccordancewithWageDetermination

•Benefitsincluding

•HealthandWelfare

•Vacation

•Holidays

•Notificationtoemployees

•Recordkeeping 8

MixedContractRequirements

•Servicesandsomethingelse?

•Constructionincludedwithinacontractthatisprincipally forservices

•e.g.,facilitiesmaintenanceservicescontracts

•MayrequireDavis-BaconActaswellasSCA

•Contractshouldidentifywhereeachapplies

•Contractorisrequiredtocomplywithboth

•Supplycontractswithminoramountofservices

•NotSCA-coveredunlessprincipallyforservices

ContractsNOTCoveredbySCA

•Contractsforleasingofspaceorequipment

•Contractsforprofessionalservices...

•Performedalmostexclusivelybyemployeeswhoareexemptunder29CFR 541

•Federally-assistedcontractsforservicesenteredintobystate governments

•(e.g.,Medicare,Medicaidprograms)

SCAStatutoryExemptions

•Construction,alteration,repairofpublicbuildingsorworks(typicallyDBAcovered)

•WorkunderWalsh-HealeyPublicContractsAct(supplyormanufacturing)

•Carriageoffreightorpersonnel(tariffratesineffect);mail-haulingisnot exempt

•Communicationsservices

•Publicutilityservices

•Directservicesbyanindividual(named)

•USpostalservicestations

OtherSCAExemptions

•SecretaryofLabormaygrantexemptionsor limitationswhennecessaryandproper

•Threeissuedthusfar:

•Remanufacturingofequipment(e.g.,substantialoverhaul ofaircraftengines)

•Maintenance,calibration,repairofofficeequipment,or medical/scientificequipment

•Officeequipment-wheretheservicesareperformedby supplierormanufacturer

OtherSCAExemptions(cont’d)

•“Commercial”services

•VERYlimitedexemptionapplicabletoveryspecific services

•e.g.,conferencelodging&meals;regularlyscheduled transportation;relocationservices

•Contractssole-sourcedorawardedonfactorsother thanprice

•Servicescommercialinnature

•HoursworkedontheGovernment’scontractare limitedincomparisontootherwork

OtherSCAExemptions(cont’d)

•“Commercial”exemptiononlyappliestotheseservices:

•Maintenanceofvehicles(otherthanmotorpools)

•Governmentcardservices

•Conferencelodging,meals

•Realestateservices

•Transportationonregular,scheduledroutes

•Relocationservices

•Equipmentmaintenanceperformedbysupplierormanufacturer

WhatAre“ServiceEmployees”?

•SCASec.8(b)defines“serviceemployees”

•Anypersonengagedinperformanceofthecontract (seetheSOW),except

•Employeeswhoqualifyforexemptionasexecutive, administrative(managerial),orprofessional, definedin29CFRPart541

•Regardlessofcontractualrelationship

IndividualEmployeeExemptions

•DOLprescribesuseoftheindividualemployeeexemptionat 29CFR541

•Theexemptionhasalwaysincludedadutiestestandasalary test

•Presentminimumsalaryrequirementis$684

•In2016,asubstantialincreasewasconsideredbutstoppedby courtinjunction,butanewproposalwasreleased

•Changeinthesalarytestwaseffective1/1/2020

IndividualEmployeeExemptions

•Executives/Supervisors–salaried(min.$684/weekfornow); supervisetwoormoreFTEs;exerciseauthority;andprimaryduty ismanagement/supervision

•Administrative/Managers–salariedorfeebasis(min.$684/week fornow);decisionsofimportanceandsignificanceusing independentjudgmentanddiscretion;andspendmostoftheir timedoingso

IndividualEmployeeExemptions

•Professionals–salariedorfeebasis(equivalentto $684/week);performworkprimarilyrequiringadvanced knowledge,predominantlyintellectual,customarily acquiredbyaprolongedcourseofspecialized intellectualinstruction(e.g.,college-level);andexercise independentjudgmentanddiscretion

IndividualEmployeeExemptions

•ComputerEmployees–salariedorfeebasis (equivalentto$684/wkfornow)ORhourly(see notebelow)

•Performhigher-levelduties(e.g.,design, development,greaterresponsibilitiessuchas teamleader,combination)

•Spendmostoftheirtimedoingtheseduties

•Ifhourly:NLT$27.63/hour

IndividualEmployeeExemptions

•Teachers–primarydutyofteaching,instruction; nosalaryrequirement;workforaneducational institution

•Artists,Writers,CreativeWorkers

•Operativeword:Creative

•OutsideSalespersons

Reg541–SalaryTest&PrimaryDuty

•Salary–apredeterminedamountregardlessofhours, quality,quantityofwork,orprofit

•Feebasis–anagreedsumforasingleoruniquejob;mustbe equivalenttominimumsalaryrequirement;cannotbe“hourly rate”

•Primaryduty–

•Principal,main,ormajorduty

•Notbasedonnumberofhoursperactivity

Reg541–SalaryTest&PrimaryDuty

•NewsRegardingtheSalaryTest–DOLreleasedafinalrule increasingthesalarytestto$684/weekeffectiveJanuary1, 2020.

•Thetotalannualcompensationrequirementfor“highlycompensated employees”isincreasingfrom$100,000peryearto$107,432per year.

•DOLwillallow“employerstousenondiscretionarybonusesand incentivepayments(includingcommissions)paidatleastannuallyto satisfyupto10%ofthestandardsalarylevel,inrecognitionof evolvingpaypractices.”

ExemptEmployees?OrNot??

•ForSCA-coveredcontractors,thedecisiontousea541 exemptionisverycomplex

•Notjustacomplianceissue,butseriousconsiderationsin staffing,contractproposals,andout-yearpricing

•Itiscriticalforallfunctionstoworktogether:

•Contractproposalpersonnel

•Humanresourcepersonnel

•Programmanagers

•Payrollandbenefitspersonnel

WhatDoesSCARequire?

•Contractingofficers(notcontractors)arerequiredto determineifSCAapplies

•AndmustattachSCAclausesandwagedeterminationsinto solicitationandcontract

•IfthecontractcontainsSCAprovisions,contractormust comply

•Thetimetoquestioncoverageisduringthesolicitation–not afteraward!

WhatDoesSCARequire?

•DepartmentofLaborhassoleandfinalauthorityto determineSCAapplicability

•Interestedpartiesmayappealcontractingofficer’sdecision toDOLforconsideration

•SCAdoesNOTapplyifclausesandWDsarenot incorporated

•Christiandoctrineisnotapplicable

•However,DOLmaydirecttheagencytocorrectthecontract andmakeSCAapplicable

SCARequirements(cont’d)

•Forservicecontracts$2,500or<

•MinimumSCAwagewillbenolessthanFLSA

•$7.25/houreffectiveatpresent(November2017)

•Forservicecontracts>$2,500

•ContractingofficersmustattachSCAclausesandWDsto solicitationandcontract

•AndmustupdateWDsateachoption,extension,substantial changeinscopeofwork,ornolessoftenthaneverytwo yearsifnotfundedannually

AReviewofSCAWage Requirements

TypesofSCAWDs

•Area(Standard)WDs–

•Generic,issuedperlocality,listsprevailingwages

•Localityisacountyorgroupofcounties

•Listsover300classifications

•Non-StandardWDs–

•Listsminimumsprevailinginspecificindustries

•e.g.,fastfoodservices,elevatormaintenance,diving,moving householdgoods,etc.

TypesofSCAWDs(cont’d)

•CBAWDs(SCASec4(c))–

•Reflectswagesandmonetarybenefitswithinacovered predecessorcollectivebargainingagreement(moreonthis later!)

•Contract-SpecificWDs–

•WDsissuedbyDOLinresponsetospecificneedsofa procurementagency

•Forunique(oftensole-sourced)contracts

•Maynotbeusedforanyothercontract

WhereDoYouGetSCAWDs?

•Forcontractors:

•Lookinyoursolicitationorcontract

•WDsmustbeattachedtothecontractbythecontractingofficer

•Forcontractingofficers:Seewww.sam.gov.

•Menu-drivendatabaseforusebyagencies

•AgenciesmayalsouseDOL’s“e98”process

•Databaseisavailabletothegeneralpublicforinformational purposesonly

AReviewofDeterminingSCA ClassificationsandMapping

DOL’sSCADirectoryofOccupations

•DirectorydefinesclassificationslistedonprevailingWDs

•Directoryislocatedonwww.sam.govLibraryPage

•DOLusesDirectorydefinitionstodeterminecontractorcompliance

•ClassificationsinacoveredCBAaredefinedbythepartiestothat CBA

Classifications&Mapping

•NewordifferentclassificationsmayNOTbecreatedbyseparating dutieswithinalistedclassification,orcombiningthedutiesoftwo ormoreclassifications

•Classificationsaredeterminedbyactualdutiesperformed,notjob titles

Classifications&Mapping

•Classificationsarenotdeterminedbylevelsofskill,competence,or experience

•Apprenticesarepermittedonlyiftheworkerisactuallyenrolledinan approvedprogram

•Apprenticesmustbepaidinaccordancewiththeirapprenticeshipprogram

Classifications&Mapping

•Contractorsmustrecordactualhoursworkedbyeachworker, foreachclassification,andpayaccordingly

•Intheabsenceofaccuratehours-workedrecords,DOLwill requirethehighestwagerateforallhoursworkedwithina workweek

•ClassificationsinacoveredCBAaredefinedbythatCBA

•Definitionsshouldbecleartoallparties

SCAConformances

•SCArequiresenforceablewageratesforeveryclassification workingonthecontract

•IftheWDdoesnotlistaclassificationrequiredtoperformthe SOW,theawardedcontractormustobtainDOLapprovalto addanewclassificationandproposedwagerate

•“Conformance”–meansthattheproposedratemustbeara reasonablerelationshiptothoselistedontheWD

SCAConformances

•Determining“reasonablerelationship”–reviewhowsimilarjob classificationsareratedinthefederalpaysystem

•Seeanexampleintab“Conformances”

•ContractorsmayNOTsplitclassificationdutiestocreatenewor differentones,createtraineepositions,helpers,orintermediate classificationlevels

SCAConformances

•ContractorinitiatestheprocessbysubmittinganSF1444tothe contractingofficer

•Therequestrequiresanemployeesignatureconcurringor disagreeingwithproposal

•ContractingofficersendstherequesttoDOL

•Thecontractingofficerhasnoauthorityforapprovalordenial

•ContractormustcomplywithDOLdecision

•(retroactivelyifdecisionisahigherrate)

SCAMappingDecisions

•Analyzetherequirementsinthecontract’sStatementofWork–whowilldowhat

•Initialquestion:exemptornon-exempt

•Ifexempt,underwhichexemption

•Whatstandardsmustbemettosustaintheexemption

•Ifnot-exempt,whatistheclassificationthatwillmeetaworker’s assignments

•Isaconformancerequestnecessary

SCAWages

•Wagesmaybepaidbyhourlyrate(s),salary,piecework, bonuses

•oranycombination

•Regardlessofpaymethod,contractormustmaintainarecord ofallhoursworkedineachclassification

•ProperSCAwagesmustbepaidforallcoveredhours

•Payrecordsmustseparatelyreportwagespaidvsfringe benefitspaidincash

WhatAre“HoursWorked”

•Reference29CFRPart785

•“...tosufferorpermittowork...”

•Mayincludepreliminarytime,‘post-liminary’time,on-call, engagedtowaitforwork,traveltime,meetings,breaks/meals, etc.

•Thepersonwhoneedstoknowtheserulesisthepersonthat assignswork,andrecordseachworker’shoursforpaypurposes

OvertimeCompensation

•UnderFairLaborStandardsAct(FLSA)

•Applicabletoallworkerswhoarenotexemptunder29CFR541 (commercialworkorcontractwork)

•Requirestimeandone-halfofaworker’s“regularrateofpay”forall hoursworkedinexcessof40perweek

•Somestatesmaycalculatedifferently

OvertimeCompensation

•UnderContractWorkHours&SafetyStandardsAct(CWHSSA)

•Appliestolaborersandmechanics(includingwatchmenandguards) onfederalserviceandconstructioncontracts

•Requirestimeandone-halfofaworker’s“regularrateofpay”forall hoursworkedinexcessof40perweek(sameasFLSA)

OvertimeCompensation

•“Regularrateofpay”–totalweeklystraight-timeearnings dividedbyweeklyhours

•Eachweekstandsonitsown

•Paymethod(multiplehourlyrates,piecework,salary,ora mix)isnotrelevanttoapplicability

•Allstraight-timeearningsmustbeincluded

•Evenifbonusesorotherpayismaderetroactive

AReviewofSCAFringeBenefits

SCAFringeBenefits

•PrevailingwageWDstypicallylistfringebenefitsasfollows:

•Vacation,statedasXweeksperyear

•Holidays,statedasXdaysperyear

•Healthandwelfare(H&W)benefits

•Statedasanhourlyamount

•Onerateissuedforalllocalities(exceptHawaii)

•RevisedbyDOLeveryJune/July,andapplicabletonew contractawardsoroptionsissuedthereafter

SCAFringeBenefits

•TypicalH&Wbenefitplans

•Life,disability,health,dental,orvisioninsurance

•Accidentaldeathordismembermentinsurance

•Sickleave(beyondwhatisrequiredbylaw)

•Employercontributionsto401(k)plans

•ESOP,pension,thriftplans

•Educationalassistance(notrequiredbythejob)

•VacationorholidayinexcessoftheWD

•Cashpaidinlieuofbenefitplans

SCAFringeBenefits

•Bonafidebenefits

•“Constitutealegally-enforceableobligation,communicatedto workersinwriting,providingpaymentofbenefitsunderadefinite formulafordeterminingtheamountofcontributionandbenefits provided,andpaidbytheemployerirrevocablytoanindependent trusteeorthird-partyadministratorpursuanttoafundorplan”

•Reference29CFRPart4,Sec.4.171

SCAFringeBenefits

•PaymentsNOTconsidered“bonafide”

•Taxesandsimilaremployerrequirements;e.g.,FICA, unemploymentinsurance;workerscompensation;benefits requiredbylaw

•Paymentsprimarilyfortheconvenienceoftheemployer,e.g., relocationortravelexpenses,toolorequipment reimbursements,uniforms,socialfunctions,gifts,club memberships

SCAH&WBenefits

•DOLissuestwoStandard(prevailing)WDsforeachlocality

•Classifications,wagerates,holiday,vacation,andH&Wratearethe sameonbothWDs

•However,themethodrequiredtobeusedbyacontractorinproviding H&WbenefitsisdifferentforeachWD

SCAH&WBenefits

•Per-PersonH&WWDs-

•Typically,“odd-numbered”(i.e.,2005-2019)

•RequirespaymentoftheH&Wrateforallhourspaideachweek (worktimeandpaidleavetime)uptoamaximumof40per week

•AppliedtocontractsoroptionsthatdoNOTfollowacontract containinganAveragingH&WWD

SCAH&WBenefits

•AveragingH&WWDs

•Typically“even-numbered”(i.e.,2005-2020)

•RequirespaymentoftheH&Wrateforallhoursworkedeachweek (includingovertime)

•Appliedtoanycontractoroptionthatfollowsacontractoroption thathadcontainedanAveragingH&WWD

SCAH&WBenefits

•Non-StandardandContract-SpecificWDswilllikelycontaina “Per-Person”H&Wrequirementregardlessofodd/even numbers

•UnderSCASec4(c),coveredCBAssupersedebenefitson StandardWDs

•WhetherhigherorlowerforCBAworkers

•PaymentmethodologyshouldbedefinedwithintheCBA

SCAH&WBenefits

•Administrativecostsincurredinprovidingbenefitsunderaselfinsured,self-fundedbenefitplanareNOTconsideredas paymenttowardtherequiredSCAH&Wrate

•Self-insuredplansmustbeapprovedbyDOL

•PaymentsofthefullH&Wratetoabonafidebenefitprovider, orirrevocablytoathird-partyadministrator(TPA)areSCA compliant(fornow)

SCAH&WBenefits

•Ifacontractorpaysamonthlypremiumtoabenefitprovideror TPA,thecontractormustregularlyensurethatthecontributions meetthefullH&Wrequirement

•A“reconciliation”ofemployeehoursagainstmonthly contributionsmustbemadenolessoftenthanquarterly

•UnderpaymentsoftheH&Wmustbepaidtotheworkersnolaterthanthe nextpayperiod

SCAH&WBenefitsandACA

•SCAandtheAffordableCareAct

•ACAdoesnotmandatethathealthcarecoveragebeprovided toemployees

•Alternatively,employersmaychoosetopaya‘tax’inlieuof plancoverage

•Becausecoverageisnotmandated,costsofsuchmaybeused tomeettheSCAH&W

•ReferenceDOL’sAAM#220

SCAH&WBenefits

•NotethattheH&Wrateof$5.36/hourwaseffectiveonprevailing wageWDsincorporatedintocontractactions(solicitations,new awards,options,extensions,orchangeinscope)issuedafterJuly16, 2024.

•NotethenewH&WrateforcontractssubjecttoEO#13706requiring sickleaveis$4.93.

•Onlaterslides...

SCAVacationBenefits

•IftheWDrequires“xweeksafteryyears,”theemployeeis vestedonhisanniversarydateandtheemployeronrecord onthatdateisobligatedtopay

•Theobligationmustbedischargedbeforetheearliestof

•Nextanniversarydate

•Completionofthecontract

•Orupontheemployee’stermination

SCAVacationBenefits

•“Continuousservice”–determinesemployeeeligibilityfor benefit

•Totallengthoftime...

•Workingcontinuouslyforpresentemployerinanycapacity

•Or,workingcontinuouslyforpredecessorcontractors,similar services,samefacility

•DOLconsidersvacationentitlementforseasonalorirregularhoursif employeeworksover1year

SCAVacationBenefits

•Factorswith“Continuousservice”–(fromDOL’sPrevailing WageResourceBook):

•Whatcausedthe“breakinservice”

•Employeesgrantedleavewithorwithoutpayduetoillness (probablynotabreakinservice)

•Employeequits(breakinservice)

•Employeeisfiredforcause(breakinserviceunlessdonetoevade requirements)

SCAHolidayBenefits

•Workerisentitledtoholidaypayiftheyworkinaholidayweek

•Notnecessarytoworkdaybefore,dayafter,etc.

•Workerisnotentitledtoholidaypayiftheholidayisnewandnot notedintheWD

•Contractormaycomplybyprovidinganalternateholiday,if communicatedtoworkersinwriting,athire

SCABenefitsDuePart-TimeWorkers

•Generallyentitledtoaproportionateamount

•WorkermustreceivefullH&Wrateforeachcoveredhour

•Maximumleave:40hrsvacation;8hrsholiday

•Example,regularpart-time:Employeeworks4hrsperday,5days perweek.Holidaysare4hrs;vacationis20hrsperweek

SCABenefitsDuePart-TimeWorkers

•Irregularorseasonalworkers–

•Thosewhoworkirregularperiodsorhours,andwhowork thiswayyeartoyearforthesamecontractor,orcontract tocontract

•Vacationatanniversarydateistheaverageweeklyhours workedinpreviousyear

•Holidayisaveragehoursworkedinpreviousweek

SCABenefitsDuePart-TimeWorkers

1099workers:

•CoveredbytheSCAproportionaltotheirhoursworked

•AccordingtotheIRS,todeterminewhethersomeoneisa1099,consider

Therearethreebasiccategoriesoffactorsthatarerelevanttodeterminingaworker’s classification:

•Behavioralcontrol(whetherthere’sarighttodirectorcontrolhowtheworkerdoesthe work)

•Financialcontrol(Whetherthere’sarighttodirectorcontrolthebusinesspartofthe work)

•Relationshipcontrol(howthebusinessandworkerperceivetherelationship)

AReviewofSCANotification Requirements

SCANotificationRequirements

•ContractormustinformworkersoftheirSCAstatusandthe wagesandbenefitstheyareentitledtoreceive.Ifnot,the contractormustposttheapplicableWD

•ContractormustalsopostDOLPosterWH1313ina“prominent” and“accessible”placeontheworksite

•WH1313isavailableat: https://www.dol.gov/whd/regs/compliance/posters/govc.pdf

SCANotificationRequirements

SCASection4(c)

•1972Amendmentsprotectscollectivelybargainedwagesand monetarybenefitsapplicabletopredecessorcontractorworkers doingsimilarservicesonthesamefacility

•Suchwagesandbenefitsbecomethesuccessorcontractor’s SCArequirement

•ForthoseworkersperformingspecificclassificationslistedintheCBA

•Regardlessofwhetherthesuccessorhirespredecessorworkers

SCASection4(c)

•WorkersperformingSCAclassificationsnotlistedin theCBAmustbepaidIAWtheSCAAreaWD,alsoin thecontract

•SCAdoesnotcovernon-monetaryprovisionsoftheCBA •Grievanceprocedures,jobassignments,

SCASection4(c)

•PartiestothepredecessorCBAwillinterprettheCBA–e.g., classifications,duties,benefiteligibility

•FringebenefitsmustbepaidtocoveredclassificationsIAWthe provisionsoftheCBA

•E.g.,health&welfare,vacation,holidays

•WhetherthesebenefitsarehigherorlowerthananSCAAreaWD

SCASection4(c)

•Thepredecessor’sCBAwillbeapplicabletothefirstcontractperiod ofthesuccessor

•Atthenextcontractperiod(option),theagencywilldetermineifthe successorhasitsownCBA–

•Ifso,thatCBAwillbeapplicabletothatcontractperiod

•IfthesuccessordoesnotbecomesignatorytoanewCBA,theagency willapplyanSCAAreaWDtothenextperiod.

•Caution:contractpricingconcernsmayarise

TimelinessforCBAs

•NeworrevisedCBAsmustbedeliveredtimelytothecontracting agency

•TheCBA’ssignatorycontractorhastheresponsibilitytoprovidethe ContractingOfficerwithacompleteandsignedcopyforincorporation intothecontractunderSCA

•Forcontractsresultingfromsealedbids,theCBAmustbereceived bytheagencyatleast10daysbeforebidopening

TimelinessforCBAs(cont’d)

•Forcontractsresultingfromotherthansealedbid(RFPs,options, extensions)–

•CBAmustbereceivedbythecontractingagencybeforeawarddateif performancestartswithin30daysofawarddate;or

•CBAmustbereceivedNLT10daysbeforeperformancestartsifgreater than30daysfromawarddate

•Note:exerciseofanoptionisconsideredanawarddate

SubstantialVariance

•29CFR4.10

•SubstantialvarianceexistswhentheCBA’swageratesand/or fringebenefitsarefoundtobeinsubstantialvariancewiththe ratesthatwouldotherwiseprevailinthelocality

•AnypartycanrequestahearingfromDOL

•OnlyDOLcandecideifasubstantialvarianceexists(generally afterahearingbeforetheAdministrativeReviewBoard)

Arm’sLengthNegotiations

•29CFR4.11andAAM159

•PrecludespartiestoCBAfromtakingadvantageofwage determinationprocess

•Prohibitscontingencylanguagebasingwageratesorbenefitson thoselistedonanSCAAreaWDor,

•Basedonreimbursementofanincreasebythecontractingagency.

•DOLmakesdeterminationsonarm’slengthissues

AReviewofSCAContract PriceAdjustments

Panel

JuliaCoon,SeniorManager,GovernmentContracting,Aprio

Julia.Coon@aprio.com

TheresaGonzalez,SeniorManager,GovernmentContracting,CohnReznick

Theresa.Gonzalez@CohnReznick.com

MichaelCippel,ManagingDirector,CherryBekaert michael.cippel@cbh.com

SCAContractPriceAdjustments

•Undersimplecost-reimbursablecontracts,pricerelieson determining“reasonable,allowable,andallocable”costs

•Underfixed-pricecontracts,thepricecanbechangedonlyunder

•TheChangesClause,or

•TheSCA/FLSAPriceAdjustmentClause

•(RefFAR52.222-43)

SCAContractPriceAdjustments

•WhenthecontractismodifiedtorequirenewSCAorFLSA wage/benefitrates,thecontractormaybeentitledtoaprice change

•NeworcurrentSCArateswillbeincorporatedintothecontractateach option,extension,substantialchangeinscopeofwork,ornolessoftenthan everytwoyearsifnotfundedannually

•(c)SCAWDsshallapplytothecontractandateachanniversaryor renewaloptiondate

•(d)Thecontractpriceorcontractunitpricelaborrateswillbe adjustedtoreflect...

•“Theactualincreaseordecreaseinwagesorbenefits...totheextentanincrease ismadetocomply...ordecreaseisvoluntarilymade...AsaresultofanewWD”

•Statedotherwise:costincurredtocomply

•(e)Adjustmentislimitedtocostofnewwages/benefits,and accompanyingFICA,unemploymenttaxes,andworkers compensation,...andshallnotincludeG&Acosts,overhead,or profit

•(b)Contractorwarrantsthatthepricesinthecontractdonot includecontingencytocoverincreasedcostsforwhichadjustment isprovidedundertheclause–noduplication

•(f)Contractorshallnotifythecontractingofficerofaclaimunderthe clausewithin30daysafterreceivinganewWDunlessextendedin writing

•PriceadjustmentsforSCA-coveredCBAs?

•NoteverythinginaCBAiscoveredbySCA,andthereforewillnotbepartofa priceadjustment

•e.g.,seniorityrules,workrules,ratificationbonuses,uniformmaintenance,tools, overtime

SCAPitfalls: CommonMisstepsandIssues

SCAPitfalls(Prime/SubIssues)

•Primecontractorsareliablefortheviolationsoftheirsubcontractors

•Selectsubcontractorswithcare!

•SCAandotherlaborrequirementsmustflowdownbycontracttoall subcontractors

•EnsureclausesandWDsmatchwiththoseintheprimecontract

•Updaterequirementsastheprimecontractisupdated(options, renewals,extensions)

•Requiresubcontractorstoconfirmcompliance

SCAPitfalls(Prime/SubIssues)

•Requiresubcontractorsto:

•Tosupportcontractpriceadjustmentrequestswithdocumentation

•Provideproperrecordstodefendallegationsofviolations

•Coveranyliabilitytheprimemayhavetopay

•Acknowledgethattheyaresubjecttoterminationiffoundin violation

•Cooperatewithenforcementauthoritiesandprimecontractor

SCAPitfalls(GSASchedules)

•ContractorsmustconfirmSCAapplicabilityanddeterminethe correctWDtoapply

•GSAincorporatesallWDsandSCAclausesintoeachofitsservicecontracts

•TheGovernment’sorderingofficerscanseldomdirectacontractoron issuesofapplicability

•PricingforSCAunderGSAServicdeSchedulesiscomplicated

•Oftenonlyonegenericpricelevel,butSCAWDsvaryconsiderably–locality tolocality

SCAPitfalls(Recordkeeping)

•Mustbemaintainedforthreeyearsafterthecompletionofwork andprovidedtoDOLifrequested:

•Employeeinformation(name,address,SSN,etc.).

•Classification,rateofwagesandbenefits,totaldaily/weeklycompensationtoeach employee.

•Dailyandweeklynumberofhoursworked.

•Deductionsfromemployeecompensation.

•Wageratesforconformedpositions.

•Predecessorcontractor’slistofemployees.

•Certificatesforspecialprograms.

SCAEnforcementReview

SCAEnforcement-A

•DOLhassoleauthorityforSCAenforcement

•Opinions,policy,investigationprocedures

•Investigationsarescheduledasaresultof

•Complaints:employee,competitor,other

•Industrysweeps,orrandomaudits

•Maybebroadorshort–

•2years(3yearsifviolationsarewillful)

•Maycoveraprime,orasub,orprimeandallsubs,orallcontractswithaprime

SCAEnforcement-B

•Generalstepsinaninvestigation:

•Initialcomplaint/randomlottery

•Reviewofinitialinformation

•Requestadditionalinformationfromcontractorinconjunctionwith initialconference

•Reviewoffurtherdocuments,witnessinterviews,Q&As

•Finaldetermination/conferenceandWH-56issuedifaviolation

•ReferraltoSolicitor/appealsprocess.

SCAEnforcement–C

•FLSAviolationsofovertimeorminimumwage)mayresultin assessedliquidateddamagesequaltotheunpaidFLSAwages

•CWHSSAovertimeviolationsmayresultinassessedliquidate damageof$25/day/underpaidemployee(effective08/01/2016)

SCAEnforcement-D

•IfthecontractdoesnotincludeSCAorDBAprovisionsorWDs, referDOLtothecontractingofficer–immediately

•DOLmaydirecttheprocurementagencytocorrectthecontract byaddingrequirements

•AgencymaydefenditsdecisiontonotapplylaborstandardsorWDs

•AlwaysletthecontractdirectwhatSCAratetopay,andwhentopaythatrate

SCAComplicationswithCOVID-19

•AnniversaryDates:

•Anniversarydatesarecriticalindeterminingentitlementtovacationbenefit.

•Ifaworkerisfurloughedorunabletowork,itisnecessarytodetermine whetherthereisabreakinservice.

•Possiblescenarios:

•WorksiteisclosedbecauseofCOVID-19

•Governmentnarrowsthescopeofthecontracttemporarily

•WorkerissickandunabletoworkduetoCOVID-19

•WorkeriscaringforchildrenwhoarenotinschoolbecauseofCOVID-19closures

•Workerpassesanniversarydatewhilefurloughed.

SCAComplicationswithCOVID-19

•SickLeave:

•Aswillbecoveredinthenextsection,manycontractworkersareentitledto sickleave(onehourforevery30hoursworked).

•Doessickleaveaccumulateduringfurlough?

•CanaworkerbemadetousesickleavebecauseofCOVID-19?

•WhathappensifaworkerhasCOVID-19symptoms?

•Vacation:

•Canemployeestakevacationtoavoidbeingfurloughed?

•Doemployeesaccumulatevacationwhilefurloughed?

SCAComplicationswithCOVID-19

•CARESAct:

•Section3610oftheCARESActentitlescontractorstopaymentsforkeeping employeesinareadystate.Governmentfunds:

maybeusedbysuchagencytomodifythetermsandconditionsofacontract, orotheragreement,withoutconsideration,toreimburseattheminimum applicablecontractbillingratesnottoexceedanaverageof40hoursperweek anypaidleave,includingsickleave,acontractorprovidestokeepitsemployees orsubcontractorsinareadystate,includingtoprotectthelifeandsafetyof Governmentandcontractorpersonnel.

SCAComplicationswithCOVID-19

•CARESAct:

•Agenciesthathavereleasedguidanceinclude:

•DoD(alsoreleasedaclassdeviation)

•GSA

•DNI

•DHS

•Thereisdisagreementamongtheagenciesonstartdateandwhatis recoverable.Profitsexcluded,butfeesmaybeincluded.

•Questionstothinkabout:

•CanacontractorrecoverforH&Wandothernon-salaryexpenses?

•WorkersonevenWDsonlyaccumulateH&Wwhileworking.Isthatcompensable?

SCAComplicationswithCOVID-19

•OtherComplianceIssues:

•Ensureproperlaborcategorieswhileworking.

•Constantcommunicationswithcontractorsinsupplychainnecessaryto ensurecompliance.

•Holidaysthatfallduringfurlough(butwhileworkerispaidbecauseof CARESAct).

EO#13658–MinimumWage

•AppliestoSCAcontracts>$2,500

•andconcessioncontractsissuedafterJan.1,2015

•Jan1,2019,EOMW$10.60/hr.

•Jan1,2020,EOMW$10.80/hr.

•EffectiveJan1,2021,EOMWwillbe$10.95/hr.

•Maycontinuetobeincreasedannually

•AlsocoversFLSAworkersperforming“workin connectionwith”anSCAcontract

•Spending>20%ofworkweekhourssupportingcovered contract

•Apprentices,trainees,workerswhosewagesarecalculatedpursuant tospecialcertificatesunderFLSAsection14(c),andtippedemployees arecovered

•ImplementedbyFAR22.19andFARClause52.222-55

EO#13658–MinimumWage

•Contractorsmaynotusefringebenefitstomeetthisrequirement (mustbewages)

•ContractorsmustincludeEOMWclauseinallcoveredsubcontracts

•Workernotificationandposterrequirements

•DOLhassoleenforcementauthority,includingdebarment

•NOTE:ContractpriceadjustmentsunderSCA/FLSA clause52.222-43differsfromadjustmentsforEOMW

•Clause52.222-55adjustscontractpriceonlyforcost incurredonwages(notincreasesinbenefits)resultingfrom increasesoccurringmid-contract,anddoesnotinclude accompanyingFICAorothertaxes

•NOTE:ContractpriceadjustmentsunderSCA/FLSA clause52.222-43differsfromadjustmentsforEOMW

•Clause52.222-55adjustscontractpriceonlyforcost incurredonwages(notincreasesinbenefits)resultingfrom increasesoccurringmid-contract,anddoesnotinclude accompanyingFICAorothertaxes

New$15MinimumWage:EO14026

Background

•StartingJanuary30,2022,Federalagenciesincorporateda$15 minimumwageinnewsolicitations(currently$11.15fromObamaeraEO).GSAtaskorderswillalsohavenewrateonthatdate.

•ByMarch30,2022,agenciesimplementedtheminimumwageinto newcontractsfordirectbillsandworkersworking“inconnection with”afederalcontract.

•Agencieswillalsoimplementthehigherwageintoexisting contracts,uponexerciseofanoption

•Minimumwagewillbeindexedforinflation

•$15minimumwageappliestocontractworkerswithdisabilities

•DOLhasenforcementauthority

New$15MinimumWage:EO14026

Applicability

•ContractssubjecttotheServiceContractAct(SCA;41U.S.C. 6701etseq.)

•ContractssubjecttotheDavis-BaconActof1931(DBA;40 U.S.C.3141etseq.)

•Concessioncontracts(nomatterwhethertheyarecoveredby theSCA)

•Contracts"inconnectionwithpropertyorlandandrelatedto offeringservicesforFederalemployees,theirdependents,or thegeneralpublic"

•WorkersbillingtothecontractorfulfillingtheSOW.

•Workersworking“inconnectionwith”thecontractifthey spendatleast20%oftheirtimesupportingcoveredfederal contracts.

•Whatis“inconnectionwith?”“Iftheworker'sworkactivities arenecessarytotheperformanceofacontractbutarenotthe specificservicescalledforbythecontract.”Onlycoversthe timetheworkersareengagedincontractcoveredwork(or working“inconnectionwithacoveredcontract).

Applicability

•Georgraphicscopeexpandingversuspreviousiteration:

•Previously50states+DC

•NowalsoPuertoRico,theU.S.VirginIslands,Outer ContinentalShelflandsasdefinedintheOuterContinental ShelfLandsAct,AmericanSamoa,Guam,the CommonwealthoftheNorthernMarianaIslands,Wake IslandandJohnstonIsland. New$15MinimumWage:EO14026

EO#13495–NondisplacementofQualifiedWorkers

•PresidentTrumpissuedanExecutiveOrderonOctober31,2019that revokedE.O.13495anddirectedtheDepartmentofLabortoceaseany andallenforcementactionsunderE.O.13495.

•Subsequently,theFARclausewaswithdrawn.

•Maywanttoconfirmwithagencythatthereisnoobligationtohire incumbentworkerforce.

•Newversioninproposedrulestage.

•GeneralRequirement:givegoodfaithofferofemploymenttoincumbentSCA workforce(excludesexemptworkers)forcontracts>SAT

•Offermustbebonafideandincludeatimelimit–nolessthan10businessdays

•Offersmaybefordifferentpositions,pay,benefits,employmentterms

•EmployeeExceptions:

•Nondisplacedpredecessorworkers

•Successor’scurrent(atleast3months)employeeswhowouldotherwisebe terminated(previousversion-notinproporsedrule)

•Predecessornon-serviceemployees

•Workerswithunsuitableperformance/unqualified

•Reduced/changedstaffingrequirements

EO#13706-PaidSickLeave

•Requirescontractorstoprovide1hourofpaidsickleavetobeaccrued forevery30hoursworked

•Uptoatotalofsevendays(56hours)ofpaidsickleaveperyear

•Reference:

•DOLregulationsat29CFRPart13

•DOLAAM#225(July25,2017)

•FAR22.21andFARClause52.222-62

•AppliestonewcontractsawardedonorafterJan.1,2017...

•ForconstructioncoveredbytheDavis-BaconAct

•ForservicescoveredbytheSCA

•Forconcessioncontracts

•Forcontractsinconnectionwithfederalpropertyorlands,related toprovidingservicesforfederalemployees,dependents,or generalpublic

•Notcovered:projectscoveredby“Davis-BaconandRelatedActs”

•Contractclausemustbefloweddowntosubcontractors

EO#13706-PaidSickLeave

•Atemporaryexceptionforworkerscoveredbyacollectivebargaining agreement-

•CBAmusthavebeenratifiedpriortoSep.30,2016

•IFtheCBAprovidesthebargainingunitworkersatleast56hrsofpaidtime offeachyear(hoursthatmaybeusedforreasonsrelatedtohealth)

•ThetemporaryexclusionappliesuntiltheCBA’sexpiration,orJan.1, 2020...

•Whicheverdateisearliest

•WDfootnotes(andDOLAAM#232)establishanH&Wrateat (now$4.22/hour)forcontractssubjecttoFARclause52.222-62

•Contributionsmadetosatisfy52.222-62maynotbecredited towardSCAfringebenefitobligations

•Contractorsarenotobligatedtopay-outaccrued(unused)sick leaveupontermination

•ContractorsmaynotuseleaverequiredasaDavis-BaconAct fringebenefitforpurposesofcomplyingwiththisEO

EO#13706-PaidSickLeave

•Recordkeepingandreportingrequirements

•Trackthehoursofexempt(541)workers

•Trackthehoursofworkersperformingwork“inconnectionwitha coveredcontract”

•“Frontloading”vs“accrual”ofsickleavehours

•Proratingleavehoursforworkersworkinglessthanayear

•UsinganexistingPaidTime-Off(PTO)policytocomplywithEOforsick leave

•Contractorsarerequiredtomakeandmaintainrelatedrecords, including

•Requirednotificationstoemployeesofsickleavebenefits,accruals, includingdatesandamountofleaveused

•Denialsofemployeerequeststousesickleave

•Contractorsmustmaintainconfidentialityofemployeemedicaland relatedrecords

•Includingrecordspertainingtodomesticviolence,sexualassault,orstalking

NegotiatingCBAsandE.O.13706Compliance

•NewCBAsnegotiatedafterSeptember30,2016mustconsiderPaidSick LeaverulestoensurecompliancewiththeSCAandE.O.13706.

•ExamplesofaCBAthatcomplieswithSCAandE.O.13706requirementsfor afulltimeworker:

1.Providesatleast7daysor56hoursofsickleavethatcomplieswiththe SickLeaverules.

2.Providesatleast7daysor56hoursofPTOsolongasthePTOcanbeused inaccordancewiththeSickLeaverules.

3.Or,providesacombinationofPTOandsickleavethatequalatleast7days andcomplieswiththeSickLeaverules.

Reminder:Parttimeand"inconnectionwith"servicepositionscoveredby theCBAareentitledtoaprorataamountofsickleave.

CorporateCultureandSCA

•SCACompliance–SkillSetsNeeded

1.SCACoverageandExemptions

2.ContractRenewalsandModifications

3.ContractPriceAdjustmentsUnderSCA

4.ContractResolicitations

5.EmployeeClassificationsUnderSCADirectory

6.WageDeterminationsandConformances

7.Individual(Employee)Exemptions

8.Recordkeeping,EmployeeNotifications

CorporateCultureandSCA

•SCACompliance–SkillSetsNeeded(cont’d)

9.HoursWorked;PayrollDeductions;OvertimeCompensation

10.CollectiveBargainingUnderSCA

11.StateandLocalWage-HourLaws

12.InvestigationProcedures;WithholdingorDebarmentPotential

13.NewRegulatoryChangesorExecutiveOrders

14.SubcontractorCompliance;Reliability;Liability

15.Non-DisplacementofQualifiedWorkers

CorporateCultureandSCA

CEOs;FinanceManagers

Bidders;ContractEvaluators

ContractsCounsel;HRCounsel

ProjectManagers

SiteManagers;FieldSupervisors

HumanResources

BenefitsProgramManagers

CorporateCultureandSCA

QUESTIONS????

• SCA WD 2015-4607 (Rev 9) (Autauga AL, Per-Person H&W)

• SCA WD 2015-4282 (Rev 16) (Wash DC, Averaging H&W)

• SCA WD 2017-0211 (Rev 8) Non-Standard Services WD (Fast-Food)

• SCA WD – 2018-11351 (Rev 1) CBA (example)

By direction of the Secretary of Labor | WAGE AND HOUR DIVISION | WASHINGTON D.C. 20210

Wage Determination No.: 2015-4607

Daniel W. Simms Division of | Revision No.: 9 Director Wage Determinations| Date Of Last Revision: 12/23/2019

Note: Under Executive Order (EO) 13658 an hourly minimum

wage of $10.80 for calendar year 2020 applies to all contracts subject to the Service Contract Act for which the contract is awarded (and any solicitation was issued) on or after January 1 2015. If this contract is covered by the EO the contractor must pay all workers in any classification listed on this wage determination at least $10.80 per hour (or the applicable wage rate listed on this wage determination if it is higher) for all hours spent performing on the contract in calendar year 2020. The EO minimum wage rate will be adjusted annually. Additional information on contractor requirements and worker protections under the EO is available at www.dol.gov/whd/govcontracts.

State: Alabama Area: Alabama Counties of Autauga Elmore Lowndes Montgomery

assist a family member (or person who is like family to the employee) who is ill injured or has other health-related needs including preventive care; or for reasons resulting from or to assist a family member (or person who is like family to the employee) who is the victim of domestic violence sexual assault or stalking. Additional information on contractor requirements and worker protections under the EO is available at www.dol.gov/whd/govcontracts.

ALL OCCUPATIONS LISTED ABOVE RECEIVE THE FOLLOWING BENEFITS:

HEALTH & WELFARE: $4.54 per hour up to 40 hours per week or $181.60 per week or $786.93 per month

HEALTH & WELFARE EO 13706: $4.22 per hour up to 40 hours per week or $168.80 per week or $731.47 per month*

*This rate is to be used only when compensating employees for performance on an SCAcovered contract also covered by EO 13706 Establishing Paid Sick Leave for Federal Contractors. A contractor may not receive credit toward its SCA obligations for any paid sick leave provided pursuant to EO 13706.

VACATION: 2 weeks paid vacation after 1 year of service with a contractor or successor; 3 weeks after 10 years and 4 after 20 years. Length of service includes the whole span of continuous service with the present contractor or successor wherever employed and with the predecessor contractors in the performance of similar work at the same Federal facility. (Reg. 29 CFR 4.173)

HOLIDAYS: A minimum of ten paid holidays per year: New Year's Day Martin Luther King Jr.'s Birthday Washington's Birthday Memorial Day Independence Day Labor Day Columbus Day Veterans' Day Thanksgiving Day and Christmas Day. (A contractor may substitute for any of the named holidays another day off with pay in accordance with a plan communicated to the employees involved.) (See 29 CFR 4.174)

THE OCCUPATIONS WHICH HAVE NUMBERED FOOTNOTES IN PARENTHESES RECEIVE THE FOLLOWING:

1) COMPUTER EMPLOYEES: Under the SCA at section 8(b) this wage determination does not apply to any employee who individually qualifies as a bona fide executive

https://betasamgov/wage-determination/2015-4607/9?keywords=2015-4607&sort=-relevance&index=wd&is_active=true&page=1

administrative or professional employee as defined in 29 C.F.R. Part 541. Because most Computer System Analysts and Computer Programmers who are compensated at a rate not less than $27.63 (or on a salary or fee basis at a rate not less than $455 per week) an hour would likely qualify as exempt computer professionals (29 C.F.R. 541. 400) wage rates may not be listed on this wage determination for all occupations within those job families. In addition because this wage determination may not list a wage rate for some or all occupations within those job families if the survey data indicates that the prevailing wage rate for the occupation equals or exceeds $27.63 per hour conformances may be necessary for certain nonexempt employees. For example if an individual employee is nonexempt but nevertheless performs duties within the scope of one of the Computer Systems Analyst or Computer Programmer occupations for which this wage determination does not specify an SCA wage rate then the wage rate for that employee must be conformed in accordance with the conformance procedures described in the conformance note included on this wage determination.

Additionally because job titles vary widely and change quickly in the computer industry job titles are not determinative of the application of the computer professional exemption. Therefore the exemption applies only to computer employees who satisfy the compensation requirements and whose primary duty consists of:

(1) The application of systems analysis techniques and procedures including consulting with users to determine hardware software or system functional specifications;

(2) The design development documentation analysis creation testing or modification of computer systems or programs including prototypes based on and related to user or system design specifications;

(3) The design documentation testing creation or modification of computer programs related to machine operating systems; or

(4) A combination of the aforementioned duties the performance of which requires the same level of skills. (29 C.F.R. 541.400).

2) AIR TRAFFIC CONTROLLERS AND WEATHER OBSERVERS - NIGHT PAY & SUNDAY PAY: If you work at night as part of a regular tour of duty you will earn a night differential and receive an additional 10% of basic pay for any hours worked between 6pm and 6am. If you are a full-time employed (40 hours a week) and Sunday is part of your regularly scheduled workweek you are paid at your rate of basic pay plus a Sunday premium of 25% of your basic rate for each hour of Sunday work which is not overtime (i.e. occasional work on Sunday outside the normal tour of duty is considered overtime work).

An 8 percent differential is applicable to employees employed in a position that represents a high degree of hazard when working with or in close proximity to ordnance explosives and incendiary materials. This includes work such as screening blending dying mixing and pressing of sensitive ordnance explosives and pyrotechnic compositions such as lead azide black powder and photoflash powder. All dry-house activities involving propellants or explosives. Demilitarization modification renovation demolition and maintenance operations on sensitive ordnance explosives and incendiary materials. All operations involving re-grading and cleaning of artillery ranges.

A 4 percent differential is applicable to employees employed in a position that represents a low degree of hazard when working with or in close proximity to ordnance (or employees possibly adjacent to) explosives and incendiary materials which involves potential injury such as laceration of hands face or arms of the employee engaged in the operation irritation of the skin minor burns and the like; minimal damage to immediate or adjacent work area or equipment being used. All operations involving unloading storage and hauling of ordnance explosive and incendiary ordnance material other than small arms ammunition. These differentials are only applicable to work that has been specifically designated by the agency for ordnance explosives and incendiary material differential pay.

If employees are required to wear uniforms in the performance of this contract (either by the terms of the Government contract by the employer by the state or local law etc.) the cost of furnishing such uniforms and maintaining (by laundering or dry cleaning) such uniforms is an expense that may not be borne by an employee where such cost reduces the hourly rate below that required by the wage determination. The Department of Labor will accept payment in accordance with the following standards as compliance:

The contractor or subcontractor is required to furnish all employees with an adequate number of uniforms without cost or to reimburse employees for the actual cost of the uniforms. In addition where uniform cleaning and maintenance is made the responsibility of the employee all contractors and subcontractors subject to this wage determination shall (in the absence of a bona fide collective bargaining agreement providing for a different amount or the furnishing of contrary affirmative proof as to the actual cost) reimburse all employees for such cleaning and maintenance at a rate of $3.35 per week (or $.67 cents per day). However in those instances where the uniforms furnished are made of ""wash and wear"" materials may be routinely washed and dried with other personal garments and do not require any special treatment such as dry cleaning daily washing or commercial laundering in order to meet the cleanliness or appearance standards set by the terms of the Government contract by the contractor by law or by the nature of the work there is no requirement that employees be reimbursed for uniform maintenance costs.

** SERVICE CONTRACT ACT DIRECTORY OF OCCUPATIONS **

The duties of employees under job titles listed are those described in the ""Service Contract Act Directory of Occupations"" Fifth Edition (Revision 1) dated September 2015 unless otherwise indicated.

** REQUEST FOR AUTHORIZATION OF ADDITIONAL CLASSIFICATION AND WAGE RATE Standard Form 1444 (SF-1444) **

Conformance Process:

The contracting officer shall require that any class of service employee which is not listed herein and which is to be employed under the contract (i.e. the work to be performed is not performed by any classification listed in the wage determination) be classified by the contractor so as to provide a reasonable relationship (i.e. appropriate level of skill comparison) between such unlisted classifications and the classifications listed in the wage determination (See 29 CFR 4.6(b)(2)(i)). Such conforming procedures shall be initiated by the contractor prior to the performance of contract work by such unlisted class(es) of employees (See 29 CFR 4.6(b)(2)(ii)). The Wage and Hour Division shall make a final determination of conformed classification wage rate and/or fringe benefits which shall be paid to all employees performing in the classification from the first day of work on which contract work is performed by them in the classification. Failure to pay such unlisted employees the compensation agreed upon by the interested parties and/or fully determined by the Wage and Hour Division retroactive to the date such class of employees commenced contract work shall be a violation of the Act and this contract. (See 29 CFR 4.6(b)(2)(v)). When multiple wage determinations are included in a contract a separate SF-1444 should be prepared for each wage determination to which a class(es) is to be conformed.

The process for preparing a conformance request is as follows:

1) When preparing the bid the contractor identifies the need for a conformed occupation(s) and computes a proposed rate(s).

2) After contract award the contractor prepares a written report listing in order the proposed classification title(s) a Federal grade equivalency (FGE) for each proposed classification(s) job description(s) and rationale for proposed wage rate(s) including information regarding the agreement or disagreement of the authorized representative of the employees involved or where there is no authorized representative the employees themselves. This report should be submitted to the contracting officer no later than 30 days after such unlisted class(es) of employees

https://betasamgov/wage-determination/2015-4607/9?keywords=2015-4607&sort=-relevance&index=wd&is_active=true&page=1

performs any contract work.

3) The contracting officer reviews the proposed action and promptly submits a report of the action together with the agency's recommendations and pertinent information including the position of the contractor and the employees to the U.S. Department of Labor Wage and Hour Division for review (See 29 CFR 4.6(b)(2)(ii)).

4) Within 30 days of receipt the Wage and Hour Division approves modifies or disapproves the action via transmittal to the agency contracting officer or notifies the contracting officer that additional time will be required to process the request.

5) The contracting officer transmits the Wage and Hour Division's decision to the contractor.

6) Each affected employee shall be furnished by the contractor with a written copy of such determination or it shall be posted as a part of the wage determination (See 29 CFR 4.6(b)(2)(iii)).

Information required by the Regulations must be submitted on SF-1444 or bond paper.

When preparing a conformance request the ""Service Contract Act Directory of Occupations"" should be used to compare job definitions to ensure that duties requested are not performed by a classification already listed in the wage determination. Remember it is not the job title but the required tasks that determine whether a class is included in an established wage determination. Conformances may not be used to artificially split combine or subdivide classifications listed in the wage determination (See 29 CFR 4.152(c)(1))."

By direction of the Secretary of Labor | WAGE AND HOUR DIVISION | WASHINGTON D.C. 20210

| Wage Determination No.: 2015-4282

Daniel W. Simms Division of | Revision No.: 16 Director Wage Determinations| Date Of Last Revision: 12/23/2019

Note: Under Executive Order (EO) 13658 an hourly minimum

States: District of Columbia Maryland Virginia

Area: District of Columbia Statewide

Maryland Counties of Calvert Charles Prince George's

Virginia Counties of Alexandria Arlington Fairfax Falls Church Fauquier Loudoun Manassas Manassas Park Prince William Stafford

the contract is awarded (and any solicitation was issued) on or after January 1 2017. If this contract is covered by the EO the contractor must provide employees with 1 hour of paid sick leave for every 30 hours they work up to 56 hours of paid sick leave each year. Employees must be permitted to use paid sick leave for their own illness injury or other health-related needs including preventive care; to assist a family member (or person who is like family to the employee) who is ill injured or has other health-related needs including preventive care; or for reasons resulting from or to assist a family member (or person who is like family to the employee) who is the victim of domestic violence sexual assault or stalking. Additional information on contractor requirements and worker protections under the EO is available at www.dol.gov/whd/govcontracts.

ALL OCCUPATIONS LISTED ABOVE RECEIVE THE FOLLOWING BENEFITS:

HEALTH & WELFARE: Life accident and health insurance plans sick leave pension plans civic and personal leave severance pay and savings and thrift plans. Minimum employer contributions costing an average of $4.54 per hour computed on the basis of all hours worked by service employees employed on the contract.

HEALTH & WELFARE EO 13706: Minimum employer contributions costing an average of $4. 22 per hour computed on the basis of all hours worked by service employees employed on the covered contracts. *

VACATION: 2 weeks paid vacation after 1 year of service with a contractor or successor 3 weeks after 5 years and 4 weeks after 15 years. Length of service includes the whole span of continuous service with the present contractor or successor wherever employed and with the predecessor contractors in the performance of similar work at the same Federal facility. (Reg. 29 CFR 4.173)

THE OCCUPATIONS WHICH HAVE NUMBERED FOOTNOTES IN PARENTHESES RECEIVE THE FOLLOWING:

1) COMPUTER EMPLOYEES: Under the SCA at section 8(b) this wage determination does not apply to any employee who individually qualifies as a bona fide executive administrative or professional employee as defined in 29 C.F.R. Part 541. Because most Computer System Analysts and Computer Programmers who are compensated at a rate not less than $27.63 (or on a salary or fee basis at a rate not less than $455 per week) an hour would likely qualify as exempt computer professionals (29 C.F.R. 541. 400) wage rates may not be listed on this wage determination for all occupations within those job families. In addition because this wage determination may not list a wage rate for some or all occupations within those job families if the survey data indicates that the prevailing wage rate for the occupation equals or exceeds $27.63 per hour conformances may be necessary for certain nonexempt employees. For example if an individual employee is nonexempt but nevertheless performs duties within the scope of one of the Computer Systems Analyst or Computer Programmer occupations for which this wage determination does not specify an SCA wage rate then the wage rate for that employee must be conformed in accordance with the conformance procedures described in the conformance note included on this wage determination.

(1) The application of systems analysis techniques and procedures including consulting with users to determine hardware software or system functional specifications;

(2) The design development documentation analysis creation testing or modification of computer systems or programs including prototypes based on and related to user or system design specifications;

(3) The design documentation testing creation or modification of computer programs related to machine operating systems; or

(4) A combination of the aforementioned duties the performance of which requires the same level of skills. (29 C.F.R. 541.400).

** HAZARDOUS PAY DIFFERENTIAL **

materials may be routinely washed and dried with other personal garments and do not require any special treatment such as dry cleaning daily washing or commercial laundering in order to meet the cleanliness or appearance standards set by the terms of the Government contract by the contractor by law or by the nature of the work there is no requirement that employees be reimbursed for uniform maintenance costs.

** SERVICE CONTRACT ACT DIRECTORY OF OCCUPATIONS **

** REQUEST FOR AUTHORIZATION OF ADDITIONAL CLASSIFICATION AND WAGE RATE Standard Form 1444 (SF-1444) **

Conformance Process:

The process for preparing a conformance request is as follows:

1) When preparing the bid the contractor identifies the need for a conformed occupation(s) and computes a proposed rate(s).

5) The contracting officer transmits the Wage and Hour Division's decision to the contractor.

6) Each affected employee shall be furnished by the contractor with a written copy of such determination or it shall be posted as a part of the wage determination (See 29 CFR 4.6(b)(2)(iii)).

Information required by the Regulations must be submitted on SF-1444 or bond paper.

By direction of the Secretary of Labor | WAGE AND HOUR DIVISION | WASHINGTON D.C. 20210

Wage Determination No.: 2017-0211

Daniel W. Simms Division of | Revision No.: 8 Director Wage Determinations| Date Of Last Revision: 04/03/2020

Note: Under Executive Order (EO) 13658 an hourly minimum

State: Georgia

Area: Georgia Counties of Baker Dougherty Lee Terrell Worth

The FAST FOOD INDUSTRY covers establishments with the following characteristics:

1. A limited fixed menu which can be prepared by workers following a short training period.

2. No alcoholic beverages served.

3. Customers ordering meals at counter or drive-up locations.

4. Food available almost immediately after order is placed.

5. Tipping not encouraged.

Note: Executive Order (EO) 13706 Establishing Paid Sick Leave for Federal Contractors applies to all contracts subject to the Service Contract Act for which the contract is awarded (and any solicitation was issued) on or after January 1 2017. If this contract is covered by the EO the contractor must provide employees with 1 hour of paid sick leave for every 30 hours they work up to 56 hours of paid sick leave each year. Employees must be permitted to use paid sick leave for their own illness injury or other health-related needs including preventive care; to assist a family member (or person who is like family to the employee) who is ill injured or has other health-related needs including preventive care; or for reasons resulting from or to assist a family member (or person who is like family to the employee) who is the victim of domestic violence sexual assault or stalking. Additional information on contractor requirements and worker protections under the EO is available at www.dol.gov/whd/govcontracts.

ALL OCCUPATIONS LISTED ABOVE RECEIVE THE FOLLOWING BENEFITS:

HEALTH & WELFARE: $1.00 per hour or $40.00 per week or $173.34 per month

VACATION: $.25 per hour in paid vacation after 1 year of service with a contractor or successor. Length of service includes the whole span of continuous service with the present contractor or successor wherever employed and with the predecessor contractors in the performance of similar work at the same Federal facility. (29 CFR 4.173)

HOLIDAYS: $.11 per hour in holiday pay. (29 CFR 4.174)

** UNIFORM ALLOWANCE **

employee where such cost reduces the hourly rate below that required by the wage determination. The Department of Labor will accept payment in accordance with the following standards as compliance:

** SERVICE CONTRACT ACT DIRECTORY OF OCCUPATIONS **

REGISTER OF WAGE DETERMINATION UNDER | U.S. DEPARTMENT OF LABOR THE SERVICE CONTRACT ACT |EMPLOYMENT STANDARDS ADMINISTRATION

By direction of the Secretary | WAGE AND HOUR DIVISION of Labor

Wage Determination No.: CBA-2018-11351

Diane Koplewski Division of | Revision No.: 1

Director Wage Determinations| Date Of Last Revision: 06/02/2018

State: Virginia

Area: Norfolk

Employed on Norfolk Naval Shipyard, Naval Sea Systems Command contract for Ship Support Services, including shipboard maintenance services and safety/security monitoring services for Naval vessels shoreside..

Collective Bargaining Agreement between contractor: Ship Shape Stuff, Inc., and union: HardWorking Seamen's Association Local 12, effective 10/01/2016 through

In accordance with Section 2(a) and 4(c) of the Service Contract Act, as amended, employees employed by the contractor(s) in performing services covered by the Collective Bargaining Agreement(s) are to be paid wage rates and fringe benefits set forth in the current collective bargaining agreement and modified extension agreement(s).

• SF1444 – Request for Additional Classifications

• WDOL Guidance on SCA Conformances

• Examples of Computations for Conformance Rates

Conformances Under the Service Contract Act

From www.wdol.gov, Library

Contracting Officers may submit completed SF1444 Requests to the Department of Labor via regular mail (address to U. S. Department of Labor, Wage and Hour Division, Government Contract Wage Determinations, 200 Constitution Avenue NW, Washington DC 20210; OR

Contracting Officers may submit completed SF1444 Requests to the Department of Labor via email. Please scan the completed form and all supporting documents into a 'pdf' file and attach to the email. Include the Contracting Officer's name, address, telephone, and email address. Submit the email to: [email address for conformances- to be announced by DOL]

The U. S. Department of Labor (DOL) issues wage determinations under the Service Contract Act (SCA) using available statistical data on prevailing wages and benefits paid in a specific locality. On occasion, the data does not contain sufficient information to issue rates for a particular classification of worker needed in the performance of the contract. Because of this, SCA provisions contain a conformance procedure for the purpose of establishing an enforceable wage and benefit rate for the missing classification.

Contractors are responsible for determining the appropriate staffing necessary to perform the contract work. Contractors are also responsible for complying with the minimum wage and benefits requirements for each classification performing work on the contract. If a classification considered necessary by the contractor for performance of the work is not listed on the applicable wage determination, the contractor must initiate a request for approval of an additional classification along with the proposed wage and benefit rates for that classification.

The awarded Contractor initiates the request by preparing an SF1444, Request for Authorization of Additional Classification and Rate, at the time of employment of the unlisted classification. (Reference FAR 22.1019 and 52.222-41(c), and Title 29 CFR Part 4.6(b)(2)). The contractor completes blocks 2 through 15 on the form. Request may be submitted to DOL without the form, but must contain the required information.

Employees, if present, or their designated representative must sign block 16 noting their concurrence or disagreement with the contractor’s proposed wage and benefit rate. If the employee indicates disagreement with the contractor's proposal, he must provide a statement supporting a recommendation for different rates. ("Designated representative" is generally a union. It cannot be the contractor 's personnel officer or other contractor representative.)

The Contractor submits the request to the Contracting Officer. The Contracting Officer reviews the request for completeness and signs the form designating the contracting agency's concurrence or disagreement with regard to the contractor's proposal. If the Contracting Officer indicates disagreement with the contractor's proposal, a statement must be attached supporting a recommendation for different rates. The Contracting Officer then submits the proposal with all attachments to DOL for approval. The Contractor is obligated to pay the proposed wage and benefit rates pending a response from DOL.

Checklist for SCA Conformances:

a. The classification must be appropriate for the contract work.

b. The contractor cannot propose a new classification by combining job duties from two or more existing classifications on the wage determination, or propose a new classification that performs only part of the duties of an existing classification.

c. The proposed classification cannot be a "trainee" or a "helper".

d. The proposed wage rate for the new classification should generally be no lower than the wage rate of the lowest skilled classification on the determination.

e. Conformance requests should not be submitted for exempt classifications (project managers, full-time supervisors, professionals such as engineers).

f. The proposed rate should bear a reasonable relationship to the wage rates listed on the wage determination. The proposed fringe benefits should be the same as listed on the wage determination.

g. The contractor must attach a brief job description to each SF1444 request submitted for classifications not included in DOL's Service Contract Act Directory of Occupations. The description must include the federal wage grade equivalent. The contractor should include all pertinent documentation supporting his request.

h. If the contractor has further questions about a conformance process, he/she may contact the nearest Regional Office of the U. S. Department of Labor, Wage and Hour Division (see DOL's website in the WDOL.GOV Library).

SCA CONFORMANCES

EXAMPLES: DETERMINING “REASONABLE RELATIONSHIP”

Contractors are obligated to determine staffing for the performance of each contract requirement, to determine appropriate use of exemptions, and to determine worker classifications under the applicable SCA WD. Contractors are also responsible for determining if a SCA conformance process is necessary in order to obtain an enforceable and DOL-approved SCA wage/benefit rate for any classification not listed on the contract-applicable SCA WD but considered to be necessary in the performance of the contract.

In order to obtain DOL’s approval of a contractor’s “request for approval of additional classifications,” the awarded contractor must submit a completed, signed SF-1444 request for approval to DOL via the contracting officer.

DOL will approve the contractor’s request only if the wage/benefit rates proposed for the missing classification “bear a reasonable relationship to the rates listed on the SCA WD” for related or similar classifications.

The example below shows how to use information from the Office of Personnel Management (OPM) in analyzing data for a conformance request. Contractors should also factor in other credible, reliable, and pertinent information that may be available for the analysis, e.g., industry surveys, local and state employment data, current DOL/Bureau of Labor Statistics data.

Examples

1. A contract statement of work requires the duties of Classification A, which is NOT listed on the applicable SCA WD. The contract is to be performed in Washington DC and in Autauga AL. OPM includes a description of the duties of Classification A, and notes that the “Federal Grade Equivalent” (FGE) for this classification is GS-4. The SCA Directory of Occupations does NOT list this classification.

2. Question: What similar classification on the SCA WD would help a contractor determine “reasonable relationship” for purposes of determining wage/benefit rates that would be approved by DOL?

3. The SCA Directory does list a Classification B, with similar but not identical duties. The FGE for Classification B is GS-3. And the SCA WD lists a Classification B with a SCA wage/benefit rate. If you use the OPM data to establish a relationship between a Classification A and a Classification B, you may find a “reasonable relationship” for SCA purposes by applying that mathematical relationship to the SCA WD information for Classification B.

SCA CONFORMANCES

EXAMPLES: DETERMINING “REASONABLE RELATIONSHIP

In Washington DC

Classification

In Autauga AL

Classification

*Percentage relationship from lower FGE level to next higher FGE level, based on GS Schedule’s locality pay rates, from GS-3 to GS-4.

NOTE: Proposed conformances should always reflect the same health & welfare rate, vacation, and holiday benefit requirements that are listed on the applicable SCA WD.

• Dept. of Labor All Agency Memo #230 on H&W

• SCA Health & Welfare Rate – Reconciliation Examples

U.S. DepartmentofLabor

JUL 8 5 2019

ALL AGENCYMEMORANDUMNUMBER230

TO: AllContractingAgenciesoftheFederalGovernmentandtheDistrictofColumbia

FROM: � CherylM.Stanton, Administrator U

SUBJECT: 2019ServiceContract ActHealthandWelfareFringeBenefit

Per29 C.F.R. § 4.52, theprevailing health andwelfarefringebenefitsissuedunderthe McNamara-O'HaraServiceContract Act (SCA)willincreasetoarateof$4.54perhour. As prescribedbytheregulations, thisbenefit rateisderivedfromthelatestBureauofLabor StatisticsEmploymentCost IndexsummaryofEmployerCost forEmployeeCompensation (ECEC). Effective July 5,2019, theWageandHourDivision(WHD) willposttheSCAhealth and welfare fringe benefit rateof$4.54perhourontheWageDeterminations (www.beta.sam.gov)andWHD (www.dol.gov/whd)websites.

History

TheSCA'simplementingregulationsprovide thatSCAwagedeterminations (WDs)havetwo differenthealthandwelfarefringebenefit levels: a"low-level"(employee-by-employee)benefit anda"high-level"(averagecost) benefit. WHDdeterminescompliancewiththelow-level benefitonanemployee-by-employeebasisanddeterminescompliancewiththehigh-level benefit basedonthecontractor's average fringe benefitcostforall service employeesworking onthecontract.

In2004, whentheECECindicatedthatthelow-levelratewasabouttoexceedthegrandfathered high-levelrateof$2.56perhour, WHD announced (inAll Agency Memorandum Number197) thatit would increase thefringebenefit rateforallwagedeterminationsandretainthetwo differentmethodsfor determining compliance. Thatpolicywillcontinueagainthis year. As such, boththeemployee-by-employeebenefitandaveragecostfringebenefitrateswillbe$4.54 perhour, upto40hoursperweek (whichis $181.60 perweek, or $786.93 permonth).

Consistentwithlongstandingpolicy,theaveragecostfringebenefitwagedeterminationwill be issuedonlyfor contractsinwhichthe formerly grandfatheredhigh-level (averagecost) benefit rate would haveapplied.

Executive Order 13706

ExecutiveOrder13706, EstablishingPaid SickLeaveforFederalContractors(EO13706), requirescertain employers thatcontractwiththefederal government toprovidetheiremployees withupto 56hours(sevendays)ofpaidsickleaveannually, includingforfamilycareand absences resulting from domestic violence, sexual assault, and stalking. EO13706 applies to new contracts withthefederal governmentthatresult fromsolicitationsissued onorafter January1, 2017(orthatareawardedoutsidethesolicitationprocessonorafterJanuary1, 2017). Moreinformationisavailableathttps://wwwdol.gov/whd/govcontracts/eo13706/.

Anemployer'scontributionsmadetosatisfyitsobligationsunderEO13706maynotbecredited towarditsobligationsunder the SCA. Tocomply withEO13706, analternatehealthand welfare ratehasbeenestablishedthat excludesthesickleaveportionof therate(determined ina mannersimilarto HawaiiWDs, whichaccountfortheHawaiiPrepaidHealthCareAct, as describedbelow). The SCAhealthandwelfarefringebenefitslevelforemployeesperforming oncontractscoveredbyEO13706willbe$4.22foreachhourof workonthecontracts,upto40 hours perweek (whichis $168.80 perweek, or $731.47 permonth).

Solicitation/Contracts Affected

AllinvitationsforbidsopenedandservicecontractsawardedonorafterJuly 5, 2019, must includeanupdated SCA WDthat comports withtheregulatoryhealthandwelfarefringebenefit determinationmethods. Contracting agenciesmaymakepen-and-inkchangestotheircurrent WDsreceivedforcontractsbeginningonorafterJuly5, 2019, andforwhichtheupdatedhealth andwelfarerateswerenotincluded. Contractingagenciesarenotrequiredtorequestarevised WDforahealthand welfare ratechange. RevisedWDsreflectingthenewbenefitsrateswillbe availableatthe Wage Determinations website (www.beta.sam.g v)onor about July 5, 2019.

WD for theStateofHawaii

Undersection2(a)(2)of the SCA, fringebenefitpaymentsrequiredbystatelawmaynotbeused tosatisfyanemployer'sfringebenefitobligations. Hawaiilaw, forexample, requiresthat most employersprovidehealthinsurance coveragefortheiremployees. Therefore, employer contributionsthataremadetosatisfyanemployer'sobligationsundertheHawaiiPrepaidHealth CareAct(HPHCA)maynotbe creditedtowardtheemployer'sobligationsunderthe SCA. The SCA WDshave addressed thisissueinthepastby excluding thehealth insurance portionof the nationwidehealthandwelfare fringe benefitrate.

SCA H&W Requirement –

Examples of Quarterly Reconciliation to Determine Compliance

Presume: First Quarter Report; five employees; vacation and holiday hours meet and do not exceed the SCA WD requirement. [W = Work hours; V = Vacation hours; H = Holiday hours]

SCA H&W Requirement:

Examples of Quarterly Reconciliation (cont’d)

Employer paid monthly premiums to providers and/or TPA for First Quarter:

Total payments by the employer for bona fide plans for all workers = $6,913

Example #1 – Reconciling for SCA H&W – Averaging

Reference page one – Total hours worked including overtime hours (excluding hours paid but not worked) is 1,818. Employer is obligated to pay an average of NLT $4.27/hour for hours worked by employees under SCA, $4.27 x 1,818 = or, $7,763 for a quarter. The employer paid into his total plan only $6,913, or $3.80/hour. So the employer is short a total of $854, or $0.47/hour.

Since the employer paid only $3.82/covered hour ($6,913 / 1,818 hours) during the First Quarter – members of the benefit pool subject to SCA are short of compliance by a total of $0.47/hour worked). He now owes each covered worker as follows (due at the next regularly scheduled pay date):

SCA H&W Requirement: Examples of Quarterly Reconciliation (cont’d)

Example #2 – Reconciling for SCA H&W – Per Person

Reference page one – Total hours paid, including work and non-work hours per worker, NTE 40 hours per week are 1,865. Employer is obligated to pay NLT $4.27/hour for each covered hour per employee under SCA. Here is the compliance computation:

Regulations:

• FAR 22.10

• FAR 22.12

• FAR 22.19

• FAR 22.21

• FAR 52.222-41

• FAR 52.222-42

• FAR 52.222-43

• FAR 52.222-55

• FAR 52.222-62

• DFARS 222-402-70

Subpart 22.10—Service Contract Labor Standards

22.1000 Scope of subpart.

This subpart prescribes policies and procedures implementing the provisions of 41 U.S.C. chapter 67, Service Contract Labor Standards (formerly known as the Service Contract Act of 1965), the applicable provisions of the Fair Labor Standards Act of 1938, as amended (29 U.S.C. 201, et seq.), and related Secretary of Labor regulations and instructions (29 CFR parts 4, 6, 8, and 1925).

22.1001 Definitions.

As used in this subpart

“Contractor” includes a subcontractor at any tier whose subcontract is subject to the provisions of the statute.

“Multiple year contracts” means contracts having a term of more than 1 year regardless of fiscal year funding. The term includes multi year contracts (see 17.103).

“United States” means the 50 States, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, Guam, the U.S. Virgin Islands, Johnston Island, Wake Island, and the outer Continental Shelf as defined in the Outer Continental Shelf Lands Act (43 U.S.C. 1331, et seq.), but does not include any other place subject to U.S. jurisdiction or any U.S. base or possession within a foreign country (29 CFR 4.112).

“Wage and Hour Division” means the unit in the Department of Labor to which is assigned functions of the Secretary of Labor under the Service Contract Labor Standards statute.

“Wage determination” means a determination of minimum wages or fringe benefits made under 41 U.S.C. 6703 or 6707(c) applicable to the employment in a given locality of one or more classes of service employees.

22.1002 Statutory and Executive order requirements.

22.1002-1 General.

Service contracts over $2,500 shall contain mandatory provisions regarding minimum wages and fringe benefits, safe and sanitary working conditions, notification to employees of the minimum allowable compensation, and equivalent Federal employee classifications and wage rates. Under 41 U.S.C. 6707(d), service contracts may not exceed 5 years.

22.1002-2 Wage determinations based on prevailing rates.

Contractors performing on service contracts in excess of $2,500 to which no predecessor contractor’s collective bargaining agreement applies shall pay their employees at least the wages and fringe benefits found by the Department of Labor to prevail in the locality or, in the absence of a wage determination, the minimum wage set forth in the Fair Labor Standards Act.

22.1002-3 Wage determinations based on collective bargaining agreements.

(a) Successor contractors performing on contracts in excess of $2,500 for substantially the same services performed in the same locality must pay wages and fringe benefits (including accrued wages and benefits and prospective increases) at least equal to those contained in any bona fide collective bargaining agreement entered into under the predecessor contract. This requirement is self-executing and is not contingent upon incorporating a wage determination or the wage and fringe benefit terms of the predecessor contractor’s collective bargaining agreement in the successor contract. This requirement will not apply if the Secretary of Labor determines

(1) After a hearing, that the wages and fringe benefits are substantially at variance with those which prevail for services of a similar character in the locality; or

(2) That the wages and fringe benefits are not the result of arm’s length negotiations.

(b) Paragraphs in this subpart 22.10 which deal with this statutory requirement and the Department of Labor’s implementing regulations are 22.1010, concerning notification to contractors and bargaining representatives of procurement dates; 22.1012-2, explaining when a collective bargaining agreement will not apply due to late receipt by the contracting officer; and 22.1013 and 22.1021, explaining when the application of a collective bargaining agreement can be challenged due to a variance with prevailing rates or lack of arm’s length bargaining.

22.1002-4 Application of the Fair Labor Standards Act minimum wage.

No contractor or subcontractor holding a service contract for any dollar amount shall pay any of its employees working on the contract less than the minimum wage specified in section 6(a)(1) of the Fair Labor Standards Act (29 U.S.C. 206).

22.1002-5 Executive Order 13658.

Executive Order 13658 establishes minimum wages for certain workers. The wage rate is subject to annual increases by an amount determined by the Secretary of Labor. See subpart 22.19. The clause at 52.222-55, Minimum Wages under Executive Order 13658, requires the Executive Order 13658 minimum wage rate to be paid if it is higher than other minimum wage rates, such as the subpart 22.10 statutory wage determination amount.

22.1002-6 Executive Order 13706.

Executive Order 13706 establishes paid sick leave for employees of certain Federal contractors. See subpart 22.21 and the clause at 52.222-62, Paid Sick Leave under Executive Order 13706.

22.1003 Applicability.

22.1003-1 General.

This subpart 22.10 applies to all Government contracts, the principal purpose of which is to furnish services in the United States through the use of service employees, except as exempted in 22.1003-3 and 22.1003-4 of this section, or any subcontract at any tier thereunder. This subpart does not apply to individual contract requirements for services in contracts not having as their principal purpose the furnishing of services. The nomenclature, type, or particular form of contract used by contracting agencies is not determinative of coverage.

22.1003-2 Geographical coverage of the Act.

The Service Contract Labor Standards statute applies to service contracts performed in the United States (see 22.1001). The Service Contract Labor Standards statute does not apply to contracts performed outside the United States.

22.1003-3 Statutory exemptions.

The Service Contract Labor Standards statute does not apply to

(a) Any contract for construction, alteration, or repair of public buildings or public works, including painting and decorating;

(b) Any work required to be done in accordance with the provisions of 41 U.S.C. chapter 65, Contracts for Materials, Supplies, Articles, and Equipment Exceeding $15,000;

(c) Any contract for transporting freight or personnel by vessel, aircraft, bus, truck, express, railroad, or oil or gas pipeline where published tariff rates are in effect;

(d) Any contract for furnishing services by radio, telephone, or cable companies subject to the Communications Act of 1934;

(e) Any contract for public utility services;

(f) Any employment contract providing for direct services to a Federal agency by an individual or individuals; or

(g) Any contract for operating postal contract stations for the U.S. Postal Service.

22.1003-4 Administrative limitations, variations, tolerances, and exemptions.

(a) The Secretary of Labor may provide reasonable limitations and may make rules and regulations allowing reasonable variations, tolerances, and exemptions to and from any or all provisions of the Service Contract Labor Standards statute other than 41 U.S.C. 6707(f). These will be made only in special circumstances where it has been determined that the limitation, variation, tolerance, or exemption is necessary and proper in the public interest or to avoid the serious impairment of Government business, and is in accord with the remedial purpose of the Service Contract Labor Standards statute to protect prevailing labor standards (41 U.S.C. 6707(b)). See 29 CFR 4.123 for a listing of administrative exemptions, tolerances, and variations. Requests for limitations, variances, tolerances, and exemptions from the Service Contract Labor Standards statute shall be submitted in writing through contracting channels and the agency labor advisor to the Wage and Hour Administrator.

(b) In addition to the statutory exemptions cited in 22.1003-3 of this subsection, the Secretary of Labor has exempted the following types of contracts from all provisions of the Service Contract Labor Standards statute:

(1) Contracts entered into by the United States with common carriers for the carriage of mail by rail, air (except air star routes), bus, and ocean vessel, where such carriage is performed on regularly scheduled runs of the trains, airplanes, buses, and vessels over regularly established routes and accounts for an insubstantial portion of the revenue therefrom.

(2) Any contract entered into by the U.S. Postal Service with an individual owner-operator for mail service if it is not contemplated at the time the contract is made that the owner-operator will hire any service employee to perform the services under the contract except for short periods of vacation time or for unexpected contingencies or emergency situations such as illness, or accident.

(3) Contracts for the carriage of freight or personnel if such carriage is subject to rates covered by section 10721 of the Interstate Commerce Act.

(1) Exemption. The Secretary of Labor has exempted from the Service Contract Labor Standards statute contracts and subcontracts in which the primary purpose is to furnish maintenance, calibration, or repair of the following types of equipment, if the conditions at paragraph (c)(2) of this subsection are met:

(i) Automated data processing equipment and office information/word processing systems.

(ii) Scientific equipment and medical apparatus or equipment if the application of microelectronic circuitry or other technology of at least similar sophistication is an essential element (for example, Product or Service Code (PSC) 6515, “Medical and Surgical Instruments, Equipment, and Supplies;” PSC 6525, “Imaging Equipment and Supplies: Medical, Dental, Veterinary;” PSC 6630, “Chemical Analysis Instruments;” and PSC 6655, “Geophysical Instruments,” are largely composed of the types of equipment exempted in this paragraph).

(iii) Office/business machines not otherwise exempt pursuant to paragraph (c)(1)(i) of this subsection, if such services are performed by the manufacturer or supplier of the equipment.

(2) Conditions. The exemption at paragraph (c)(1) of this subsection applies if all the following conditions are met for a contract (or a subcontract):

(i) The items of equipment to be serviced under the contract are used regularly for other than Government purposes and are sold or traded by the contractor in substantial quantities to the general public in the course of normal business operations.

(ii) The services will be furnished at prices which are, or are based on, established catalog or market prices for the maintenance, calibration, or repair of such equipment. As defined at 29 CFR 4.123(e)(1)(ii)(B)

(A) An established catalog price is a price included in a catalog price list, schedule, or other form that is regularly maintained by the manufacturer or the contractor, is either published or otherwise available for inspection by customers, and states prices at which sales currently, or were last, made to a significant number of buyers constituting the general public.

(B) An established market price is a current price, established in the usual course of trade between buyers and sellers free to bargain, which can be substantiated from sources independent of the manufacturer or contractor.

(iii) The contractor will use the same compensation (wage and fringe benefits) plan for all service employees performing work under the contract as the contractor uses for these employees and equivalent employees servicing the same equipment of commercial customers.

(iv) The apparent successful offeror certifies to the conditions in paragraph (c)(2)(i) through (iii) of this subsection. (See 22.1006(e).)

(3) Affirmative determination and contract award

(i) For source selections where the contracting officer has established a competitive range, if the contracting officer determines that one or more of the conditions in paragraphs 22.1003-4 (c)(2)(i) through (iii) of an offeror’s certification will not be met, the contracting officer shall identify the deficiency to the offeror before receipt of the final proposal revisions. Unless the offeror provides a revised offer acknowledging applicability of the Service Contract Labor Standards statute or demonstrating to the satisfaction of the contracting officer an

ability to meet all required conditions for exemption, the offer will not be further considered for award.

(ii) The contracting officer shall determine in writing the applicability of this exemption to the contract before contract award. If the apparent successful offeror will meet all conditions in paragraph (c)(2) of this subsection, the contracting officer shall make an affirmative determination and award the contract without the otherwise applicable Service Contract Labor Standards clause(s).

(iii) If the apparent successful offeror does not certify to the conditions in paragraph (c)(2)(i) through (iii) of this subsection, the contracting officer shall incorporate in the contract the Service Contract Act clause (see 22.1006(a)) and, if the contract will exceed $2,500, the appropriate Department of Labor wage determination (see 22.1007).

(4) Department of Labor determination

(i) If the Department of Labor determines after award of the contract that any condition for exemption in paragraph (c)(2) of this subsection has not been met, the exemption shall be deemed inapplicable, and the contract shall become subject to the Service Contract Labor Standards statute, effective as of the date of the Department of Labor determination. In such case, the procedures at 29 CFR 4.123(e)(1)(iv) and 29 CFR 4.5(c) shall be followed.

(ii) If the Department of Labor determines that any conditions in paragraph (c)(2) of this subsection have not been met with respect to a subcontract, the exemption shall be deemed inapplicable. The contractor may be responsible for ensuring that the subcontractor complies with the Service Contract Labor Standards statute, effective as of the date of the subcontract award.

(d) Contracts for certain services.

(1) Exemption. Except as provided in paragraph (d)(5) of this subsection, the Secretary of Labor has exempted from the Service Contract Labor Standards statute contracts and subcontracts in which the primary purpose is to provide the following services, if the conditions in paragraph (d)(2) of this subsection are met:

(i) Automobile or other vehicle (e.g., aircraft) maintenance services (other than contracts or subcontracts to operate a Government motor pool or similar facility).

(ii) Financial services involving the issuance and servicing of cards (including credit cards, debit cards, purchase cards, smart cards, and similar card services).

(iii) Hotel/motel services for conferences, including lodging and/or meals, that are part of the contract or subcontract for the conference (which must not include ongoing contracts for lodging on an as needed or continuing basis).

(iv) Maintenance, calibration, repair, and/or installation (where the installation is not subject to the Construction Wage Rate Requirements statute, as provided in 29 CFR 4.116(c)(2)) services for all types of equipment where the services are obtained from the manufacturer or supplier of the equipment under a contract awarded on a sole source basis.

(v) Transportation by common carrier of persons by air, motor vehicle, rail, or marine vessel on regularly scheduled routes or via standard commercial services (not including charter services).

(vi) Real estate services, including real property appraisal services, related to housing Federal agencies or disposing of real property owned by the Government.

(vii) Relocation services, including services of real estate brokers and appraisers to assist Federal employees or military personnel in buying and selling homes (which shall not include actual moving or storage of household goods and related services).

(2) Conditions. The exemption for the services in paragraph (d)(1) of this subsection applies if all the following conditions are met for a contract (or for a subcontract):

(i)(A) Except for services identified in paragraph (d)(1)(iv) of this subsection, the contractor will be selected for award based on other factors in addition to price or cost, with the combination of other factors at least as important as price or cost; or

(B) The contract will be awarded on a sole source basis.

(ii) The services under the contract are offered and sold regularly to non-Governmental customers, and are provided by the contractor (or subcontractor in the case of an exempt subcontract) to the general public in substantial quantities in the course of normal business operations.

(iii) The contract services are furnished at prices that are, or are based on, established catalog or market prices. As defined at 29 CFR 4.123(e)(2)(ii)(C)

(A) An established catalog price is a price included in a catalog, price list, schedule, or other form that is regularly maintained by the contractor, is either published or otherwise available for inspection by customers, and states prices at which sales are currently, or were last, made to a significant number of buyers constituting the general public; and

(iv) Each service employee who will perform the services under the contract will spend only a small portion of his or her time (a monthly average of less than 20 percent of the available hours on an annualized basis, or less than 20 percent of available hours during the contract period if the contract period is less than a month) servicing the Government contract.

(v) The contractor will use the same compensation (wage and fringe benefits) plan for all service employees performing work under the contract as the contractor uses for these employees and equivalent employees servicing commercial customers.

(vi) The contracting officer (or contractor with respect to a subcontract) determines in advance before issuing the solicitation, based on the nature of the contract requirements and knowledge of the practices of likely offerors, that all or nearly all offerors will meet the conditions in paragraph (d)(2)(ii) through (v) of this subsection. If the services are currently being performed under contract, the contracting officer (or contractor with respect to a subcontract) shall consider the practices of the existing contractor in making a determination regarding the conditions in paragraphs (d)(2)(ii) through (v) of this subsection.

(vii)(A) The apparent successful offeror certifies that the conditions in paragraphs (d)(2)(ii) through (v) will be met; and

(B) For other than sole source awards, the contracting officer determines that the same certification is obtained from substantially all other offerors that are (1) In the competitive range, if discussions are to be conducted (see FAR 15.306(c)); or

(2) Considered responsive, if award is to be made without discussions (see FAR 15.306(a)).

(3) Contract award or resolicitation.

(i) If the apparent successful offeror does not certify to the conditions, the contracting officer shall insert in the contract the applicable Service Contract Labor Standards clause(s) (see 22.1006) and, if the contract will exceed $2,500, the appropriate Department of Labor wage determination (see 22.1007).

(ii) The contracting officer shall award the contract without the otherwise applicable Service Contract Labor Standards clause(s) if

(A) The apparent successful offeror certifies to the conditions in paragraphs (d)(2)(ii) through (v) of this subsection;

(B) The contracting officer determines that the same certification is obtained from substantially all other offerors that are

(1) In the competitive range, if discussions are to be conducted (see FAR 15.306); or

(2) Considered responsive, if award is to be made without discussions (see FAR 15.306(a)); and

(iii) If the conditions in paragraph (d)(3)(ii) of this subsection are not met, then the contracting officer shall resolicit, amending the solicitation by removing the exemption provision from the solicitation as prescribed at 22.1006(e)(3). The contract will include the applicable Service Contract Labor Standards clause(s) as prescribed at 22.1006 and, if the contract will exceed $2,500, the appropriate Department of Labor wage determination (see 22.1007).

(4) Department of Labor determination.

(i) If the Department of Labor determines after award of the contract that any conditions for exemption at paragraph (d)(2) of this subsection have not been met, the exemption shall be deemed inapplicable, and the contract shall become subject to the Service Contract Labor Standards statute. In such case, the procedures at 29 CFR 4.123(e)(2)(iii) and 29 CFR 4.5(c) shall be followed.

(ii) If the Department of Labor determines that any conditions in paragraph (d)(2) of this subsection have not been met with respect to a subcontract, the exemption shall be deemed inapplicable. The contractor may be responsible for ensuring that the subcontractor complies with the Service Contract Labor Standards statute, effective as of the date of the subcontract award.

(5) Exceptions. The exemption at paragraph (d)(1) of this subsection does not apply to solicitations and contracts (subcontracts)

(i) Awarded under , 41 U.S.C. chapter 85, Committee for Purchase from People Who Are Blind or Severely Disabled (see subpart 8.7).

(ii) For the operation of a Government facility, or part of a Government facility (but may be applicable to subcontracts for services); or

(iii) Subject to 41 U.S.C. 6707(c) (see 22.1002-3).

22.1003-5 Some examples of contracts covered.

The following examples, while not definitive or exclusive, illustrate some of the types of services that have been found to be covered by the Service Contract Labor Standards statute (see 29 CFR 4.130 for additional examples):

(a) Motor pool operation, parking, taxicab, and ambulance services.

(b) Packing, crating, and storage.

(d) Food service and lodging.

(e) Laundry, dry-cleaning, linen-supply, and clothing alteration and repair services.

(f) Snow, trash, and garbage removal.

(g) Aerial spraying and aerial reconnaissance for fire detection.

(h) Some support services at installations, including grounds maintenance and landscaping.

(i) Certain specialized services requiring specific skills, such as drafting, illustrating, graphic arts, stenographic reporting, or mortuary services.

(j) Electronic equipment maintenance and operation and engineering support services.

(k) Maintenance and repair of all types of equipment, for example, aircraft, engines, electrical motors, vehicles, and electronic, office and related business and construction equipment. (But see 22.1003-4(c)(1) and (d)(1)(iv).)

(l) Operation, maintenance, or logistics support of a Federal facility.

(m) Data collection, processing and analysis services.

22.1003-6 Repair distinguished from remanufacturing of equipment.

(a) Contracts principally for remanufacturing of equipment which is so extensive as to be equivalent to manufacturing are subject to 41 U.S.C. chapter 65, Contracts for Materials, Supplies, Articles, and Equipment Exceeding $15,000, rather than to the Service Contract Labor Standards statute. Remanufacturing shall be deemed to be manufacturing when the criteria in either subparagraphs (a)(1) or (a)(2) of this subsection are met.

(1) Major overhaul of an item, piece of equipment, or material which is degraded or inoperable, and under which all of the following conditions exist:

(i) The item or equipment is required to be completely or substantially torn down into individual component parts.

(ii) Substantially all of the parts are reworked, rehabilitated, altered and/or replaced.

(iii) The parts are reassembled so as to furnish a totally rebuilt item or piece of equipment.

(iv) Manufacturing processes similar to those which were used in the manufacturing of the item or piece of equipment are utilized.

(v) The disassembled components, if usable (except for situations where the number of items or pieces of equipment involved are too few to make it practicable) are commingled with existing inventory and, as such, lose their identification with respect to a particular piece of equipment.

(vi) The items or equipment overhauled are restored to original life expectancy, or nearly so.

(vii) Such work is performed in a facility owned or operated by the contractor.

(2) Major modification of an item, piece of equipment, or material which is wholly or partially obsolete, and under which all of the following conditions exist:

(i) The item or equipment is required to be completely or substantially torn down.

(ii) Outmoded parts are replaced.

(iii) The item or equipment is rebuilt or reassembled.

(iv) The contract work results in the furnishing of a substantially modified item in a usable and serviceable condition.

(v) The work is performed in a facility owned or operated by the contractor.

(b) Remanufacturing does not include the repair of damaged or broken equipment which does not require a complete teardown, overhaul, and rebuild as described in subparagraphs (a)(1) and (a)(2) of this subsection, or the periodic and routine maintenance, preservation, care, adjustment, upkeep, or servicing of equipment to keep it in usable, serviceable, working order. Such contracts typically are billed on an hourly rate (labor plus materials and parts) basis. Any contract principally for this type of work is subject to the Service Contract Labor Standards statute. Examples of such work include the following:

(1) Repair of an automobile, truck, or other vehicle, construction equipment, tractor, crane, aerospace, air conditioning and refrigeration equipment, electric motors, and ground powered industrial or vehicular equipment.

(2) Repair of typewriters and other office equipment (but see 22.1003-4(c)(1) and (d)(1)(iv)).

(3) Repair of appliances, radios, television sets, calculators, and other electronic equipment.

(4) Inspecting, testing, calibration, painting, packaging, lubrication, tune-up, or replacement of internal parts of equipment listed in subparagraphs (b)(1), (b)(2), and (b)(3) of this subsection.

(5) Reupholstering, reconditioning, repair, and refinishing of furniture.

22.1003-7 Questions concerning applicability of the Service Contract Labor Standards statute.

If the contracting officer questions the applicability of the Service Contract Labor Standards statute to an acquisition, the contracting officer shall request the advice of the agency labor advisor. Unresolved questions shall be submitted in a timely manner to the Administrator, Wage and Hour Division, for determination.

22.1004 Department of Labor responsibilities and regulations.

Under the Service Contract Labor Standards statute, the Secretary of Labor is authorized and directed to enforce the provisions of the Service Contract Labor Standards statute, make rules and regulations, issue orders, hold hearings, make decisions, and take other appropriate action. The Department of Labor has issued implementing regulations on such matters as

(a) Service contract labor standards provisions and procedures (29 CFR Part 4, Subpart A);

(b) Wage determination procedures (29 CFR part 4, subparts A and B);

(c) Application of the Service Contract Labor Standards statute (rulings and interpretations) (29 CFR Part 4, Subpart C);

(d) Compensation standards (29 CFR Part 4, Subpart D);

(e) Enforcement (29 CFR Part 4, Subpart E);

(f) Safe and sanitary working conditions (29 CFR Part 1925);

(g) Rules of practice for administrative proceedings enforcing service contract labor standards (29 CFR Part 6); and

(h) Practice before the Administrative Review Board (29 CFR part 8).

22.1005 [Reserved]

22.1006 Solicitation provisions and contract clauses.

(a)(1) The contracting officer shall insert the clause at 52.222-41, Service Contract Labor Standards, in solicitations and contracts (except as provided in paragraph (a)(2) of this section) if the contract is subject to the Service Contract Labor Standards statute and is

(i) Over $2,500; or

(ii) For an indefinite dollar amount and the contracting officer does not know in advance that the contract amount will be $2,500 or less.

(2) The contracting officer shall not insert the clause at 52.222-41 (or any of the associated Service Contract Labor Standards statute clauses as prescribed in this section for possible use when 52.222-41 applies) in the resultant contract if

(i) The solicitation includes the provision at

(A) 52.222-48, Exemption from Application of the Service Contract Labor Standards statute to Contracts for Maintenance, Calibration, or Repair of Certain Equipment Certification;

(B) 52.222-52, Exemption from Application of the Service Contract Labor Standards statute to Contracts for Certain Services Certification; or

(C) Either of the comparable certifications is checked as applicable in the provision at 52.204-8(c)(2) or 52.212-3(k); and

(ii) The contracting officer has made the determination, in accordance with paragraphs (c)(3) or (d)(3) of subsection 22.1003-4, that the Service Contract Labor Standards statute does not apply to the contract. (In such case, insert the clause at 52.222-51, Exemption from Application of the Service Contract Labor Standards to Contracts for Maintenance, Calibration, or Repair of Certain Equipment-Requirements, or 52.222-53, Exemption from Application of the Service Contract Labor Standards to Contracts for Certain Services-Requirements, in the contract, in accordance with the prescription at paragraph (e)(2)(ii) or (e)(4)(ii) of this subsection).

(b) The contracting officer shall insert the clause at 52.222-42, Statement of Equivalent Rates for Federal Hires, in solicitations and contracts if the contract amount is expected to be over $2,500 and the Service Contract Labor Standards statute is applicable. (See 22.1016.)

(c)(1) The contracting officer shall insert the clause at 52.222-43, Fair Labor Standards Act and Service Contract Labor Standards Price Adjustment (Multiple Year and Option Contracts), or another clause which accomplishes the same purpose, in solicitations and contracts if the contract is expected to be a fixed-price, time-and-materials, or labor-hour service contract containing the clause at 52.222-41, Service Contract Labor Standards, and is a multiple year contract or is a contract with options to renew which exceeds the simplified acquisition threshold. The clause may be used in contracts that do not exceed the simplified acquisition threshold. The clause at 52.222-43, Fair Labor Standards Act and Service Contract Labor Standards Price Adjustment (Multiple Year and Option Contracts), applies to both contracts subject to area prevailing wage determinations and contracts subject to the incumbent contractor’s collective bargaining agreement in effect during this contract’s preceding contract period (see 22.1002-2 and 22.1002-3). Contracting officers shall ensure that contract prices or contract unit price labor rates are adjusted only to the extent that a contractor’s increases or decreases in applicable wages and fringe benefits are made to comply with the requirements set forth in the clauses at 52.222-43 (subparagraphs (d)(1), (2) and (3)), or 52.222-44(subparagraphs (b)(1) and (2)). (For example, the prior year wage determination required a minimum wage rate of $4.00 per hour. The contractor actually paid $4.10. The new wage determination increases the

minimum rate to $4.50. The contractor increases the rate actually paid to $4.75 per hour. The allowable price adjustment is $.40 per hour.)

(2) The contracting officer shall insert the clause at 52.222-44, Fair Labor Standards Act and Service Contract Labor Standards Price Adjustment, in solicitations and contracts if the contract is expected to be a fixed-price, time-and-materials, or labor-hour service contract containing the clause at 52.222-41, Service Contract Labor Standards, exceeds the simplified acquisition threshold, and is not a multiple year contract or is not a contract with options to renew. The clause may be used in contracts that do not exceed the simplified acquisition threshold. The clause at 52.222-44, Fair Labor Standards Act and Service Contract Labor Standards Price Adjustment, applies to both contracts subject to area prevailing wage determinations and contracts subject to contractor collective bargaining agreements (see 22.1002-2 and 22.1002-3).

(3) The clauses prescribed in paragraph 22.1006(c)(1) cover situations in which revised minimum wage rates are applied to contracts by operation of law, or by revision of a wage determination in connection with (i) exercise of a contract option or (ii) extension of a multiple year contract into a new program year. If a clause prescribed in 16.203-4(d) is used, it must not conflict with, or duplicate payment under, the clauses prescribed in this paragraph 22.1006(c).

(d) [Reserved]

(e)(1) The contracting officer shall insert the provision at 52.222-48, Exemption from Application of the Service Contract Labor Standards to Contracts for Maintenance, Calibration, or Repair of Certain Equipment-Certification, in solicitations that

(i) Include the clause at 52.222-41, Service Contract Labor Standards; and

(ii) The contract may be exempt from the Service Contract Labor Standards statute in accordance with 22.1003-4(c).

(2) The contracting officer shall insert the clause at 52.222-51, Exemption from Application of the Service Contract Labor Standards to Contracts for Maintenance, Calibration, or Repair of Certain Equipment-Requirements

(i) In solicitations that include the provision at 52.222-48, or the comparable provision is checked as applicable in the clause at 52.204-8(c)(2) or 52.212-3(k)(1); and

(ii) In resulting contracts in which the contracting officer has determined, in accordance with 22.1003-4(c)(3), that the Service Contract Labor Standards statute does not apply.

(3)(i) Except as provided in paragraph (e)(3)(ii) of this section, the contracting officer shall insert the provision at 52.222-52, Exemption from Application of the Service Contract Labor Standards to Contracts for Certain Services Certification, in solicitations that

(A) Include the clause at 52.222-41, Service Contract Labor Standards, and (B) The contract may be exempt from the Service Contract Labor Standards statute in accordance with 22.1003-4(d).

(ii) When resoliciting in accordance with 22.1003-4(d)(3)(iii), amend the solicitation by removing the provision at 52.222-52 from the solicitation.

(4) The contracting officer shall insert the clause at 52.222-53, Exemption from Application of the Service Contract Labor Standards to Contracts for Certain Services Requirements

(i) In solicitations that include the provision at 52.222-52, or the comparable provision is checked as applicable in 52.204-8(c)(2) or 52.212-3(k)(2); and

(ii) In resulting contracts in which the contracting officer has determined, in accordance with 22.1003-4(d)(3), that the Service Contract Labor Standards statute does not apply.

(f) The contracting officer shall insert the clause at 52.222-49, Service Contract Labor Standards-Place of Performance Unknown, if using the procedures prescribed in 22.1009-4.

22.1007 Requirement to obtain wage determinations.

The contracting officer shall obtain wage determinations for the following service contracts:

(a) Each new solicitation and contract in excess of $2,500.

(b) Each contract modification which brings the contract above $2,500 and (1) Extends the existing contract pursuant to an option clause or otherwise; or (2) Changes the scope of the contract whereby labor requirements are affected significantly.

(1) Annual anniversary date if the contract is subject to annual appropriations; or (2) Biennial anniversary date if the contract is not subject to annual appropriations and its proposed term exceeds 2 years unless otherwise advised by the Wage and Hour Division.

22.1008 Procedures for obtaining wage determinations.

22.1008-1 Obtaining wage determinations.

(a) Contracting officers may obtain most prevailing wage determinations using the WDOL website. Contracting officers may also use the Department of Labor’s e98 electronic process, located on the WDOL website, to request a wage determination directly from the Department of Labor. If the WDOL database does not contain the applicable prevailing wage determination for a contract action, the contracting officer must use the e98 process to request a wage determination from the Department of Labor.

(b) In using the e98 process to obtain prevailing wage determinations, contracting officers shall provide as complete and accurate information on the e98 as possible. Contracting officers shall ensure that the email address submitted on an e98 request is accurate.

(c) The contracting officer must anticipate the amount of time required to gather the information necessary to obtain a wage determination, including sufficient time, if necessary, to contact the Department of Labor to request wage determinations that are not available through use of the WDOL.

(d) Although the WDOL website provides assistance to the contracting agency to select the correct wage determination, the contracting agency remains responsible for the wage determination selected. If the contracting agency has used the e98 process, the Department of Labor will respond to the contracting agency based on the information provided on the e98. The contracting agency may rely upon the Department of Labor response as the correct wage determination for the contract.

(e) To obtain the applicable wage determination for each contract action, the contracting officer shall determine the following information concerning the service employees expected to be employed by the contractor and any subcontractors in performing the contract:

(1) Determine the classes of service employees to be utilized in performance of the contract using the Wage and Hour Division’s Service Contract Act Directory of Occupations (Directory). The Directory can be found on WDOL’s Library Page, and is for sale by the Superintendent of Documents, U.S. Government Printing Office.

(2) Determine the locality where the services will be performed (see 22.1009).

(3) Determine whether 41 U.S.C. 6707(c) applies (see 22.1008-2, 22.1010 and 22.1002-2).

(4) Determine the wage rate that would be paid each class if employed by the agency and subject to the wage provisions of 5 U.S.C. 5341 and/or 5332 (see 22.1016).

(f) If the contracting officer has questions regarding the procedures for obtaining a wage determination, or questions regarding the selection of a wage determination, the contracting officer should request assistance from the agency labor advisor.

22.1008-2 Successorship with incumbent contractor collective bargaining agreement.

(a) Early in the acquisition cycle, the contracting officer shall determine whether 41 U.S.C. 6707(c) affects the new acquisition. The contracting officer shall determine whether there is a predecessor contract covered by the Service Contract Labor Standards statute and, if so, whether the incumbent prime contractor or its subcontractors and any of their employees have a collective bargaining agreement.

(b) 41 U.S.C. 6707(c) provides that a successor contractor must pay wages and fringe benefits (including accrued wages and benefits and prospective increases) to service employees at least equal to those agreed upon by a predecessor contractor under the following conditions:

(1) The services to be furnished under the proposed contract will be substantially the same as services being furnished by an incumbent contractor whose contract the proposed contract will succeed.

(2) The services will be performed in the same locality.

(3) The incumbent prime contractor or subcontractor is furnishing such services through the use of service employees whose wages and fringe benefits are the subject of one or more collective bargaining agreements.

(1) 41 U.S.C. 6707(c) will not apply if the incumbent contractor enters into a collective bargaining agreement for the first time and the agreement does not become effective until after the expiration of the incumbent’s contract.

(2) If the incumbent contractor enters into a new or revised collective bargaining agreement during the period of the incumbent’s performance on the current contract, the terms of the new or revised agreement shall not be effective for the purposes of 41 U.S.C. 6707(c) under the following conditions:

(i)(A) In sealed bidding, the contracting agency receives notice of the terms of the collective bargaining agreement less than 10 days before bid opening and finds that there is not reasonable time still available to notify bidders (see 22.1002-2(a)); or

(B) For contractual actions other than sealed bidding, the contracting agency receives notice of the terms of the collective bargaining agreement after award, provided that the start of performance is within 30 days of award (see 22.1002-2(b)); and

(ii) The contracting officer has given both the incumbent contractor and its employees’ collective bargaining agent timely written notification of the applicable acquisition dates (see 22.1010).

(d)(1) If 41 U.S.C. 6707(c) applies, the contracting officer shall obtain a copy of any collective bargaining agreement between an incumbent contractor or subcontractor and its employees. Obtaining a copy of an incumbent contractor’s collective bargaining agreement may involve coordination with the administrative contracting officer responsible for administering the

predecessor contract. (Paragraph (m) of the clause at 52.222-41, Service Contract Labor Standards, requires the incumbent prime contractor to furnish the contracting officer a copy of each collective bargaining agreement.)

(2) If the contracting officer has timely received the collective bargaining agreement, the contracting officer may use the WDOL website to prepare a wage determination referencing the agreement and incorporate that wage determination, attached to a complete copy of the collective bargaining agreement, into the successor contract action. In using the WDOL process, it is not necessary to submit a copy of the collective bargaining agreement to the Department of Labor unless requested to do so.

(3) The contracting officer may also use the e98 process on WDOL to request that the Department of Labor prepare the cover wage determination. The Department of Labor’s response to the e98 may include a request for the contracting officer to submit a complete copy of the collective bargaining agreement. Any questions regarding the applicability of the Service Contract Labor Standards statute to a collective bargaining agreement should be directed to the agency labor advisor.

(e)(1) 41 U.S.C. 6707(c) will not apply if the Secretary of Labor determines (i) after a hearing, that the wages and fringe benefits in the predecessor contractor’s collective bargaining agreement are substantially at variance with those which prevail for services of a similar character in the locality, or (ii) that the wages and fringe benefits in the predecessor contractor’s collective bargaining agreement are not the result of arm’s length negotiations (see 22.1013and 22.1021). The Department of Labor (DOL) has concluded that contingent collective bargaining agreement provisions that attempt to limit a contractor’s obligations by means such as requiring issuance of a wage determination by the DOL, requiring inclusion of the wage determination in the contract, or requiring the Government to adequately reimburse the contractor, generally reflect a lack of arm’s length negotiations.

(2) If the contracting officer’s review (see 22.1013) indicates that monetary provisions of the collective bargaining agreement may be substantially at variance or may not have been reached as a result of arm’s length bargaining, the contracting officer shall immediately contact the agency labor advisor to consider if further action is warranted.

(f) If the services are being furnished at more than one location and the collectively bargained wage rates and fringe benefits are different at different locations or do not apply to one or more locations, the contracting officer shall identify the locations to which the agreements apply.

(g) If the collective bargaining agreement does not apply to all service employees under the contract, the contracting officer shall access WDOL to obtain the prevailing wage determination for those service employee classifications that are not covered by the collective bargaining agreement. The contracting officer shall separately list in the solicitation and contract the service employee classifications

(1) Subject to the collective bargaining agreement; and

(2) Not subject to any collective bargaining agreement.

22.1009 Place of performance unknown.

22.1009-1 General.

If the place of performance is unknown, the contracting officer may use the procedures in this section. The contracting officer should first attempt to identify the specific places or geographical areas where the services might be performed (see 22.1009-2) and then may follow the procedures either in 22.1009-3 or in 22.1009-4.

22.1009-2 Attempt to identify possible places of performance.

The contracting officer should attempt to identify the specific places or geographical areas where the services might be performed. The following may indicate possible places of performance:

(a) Locations of previous contractors and their competitors.

(b) Databases available via the Internet for lists of prospective offerors and contractors.

22.1009-3 All possible places of performance identified.

(a) If the contracting officer can identify all the possible places or areas of performance (even though the actual place of performance will not be known until the successful offeror is chosen), the contracting officer shall obtain a wage determination for each locality where services may be performed (see 22.1008).

(b) If the contracting officer subsequently learns of any potential offerors in previously unidentified places before the closing date for submission of offers, the contracting officer shall

(1) Obtain wage determinations for the additional places of performance and amend the solicitation to include all wage determinations. If necessary, the contracting officer shall extend the time for submission of final offers; and

(2) Follow the procedures in 22.1009-4.

22.1009-4 All possible places of performance not identified.

If the contracting officer believes that there may be offerors interested in performing in unidentified places or areas, the contracting officer may use the following procedures:

(a) Include the following information in the synopsis and solicitation:

(1) That the place of performance is unknown.

(2) The possible places or areas of performance that the contracting officer has already identified.

(3) That the contracting officer will obtain wage determinations for additional possible places of performance if asked to do so in writing.

(4) The time and date by which offerors must notify the contracting officer of additional places of performance.

(b) Include the information required by paragraphs (a)(2) and (a)(4) of this section in the clause at 52.222-49, Service Contract Labor Standards–Place of Performance Unknown (see 22.1006(f)). The closing date for receipt of offerors’ requests for wage determinations for additional possible places of performance should allow reasonable time for potential offerors to review the solicitation and determine their interest in competing. Generally, 10 to 15 days from the date of issuance of the solicitation may be considered a reasonable period of time.

(c) The procedures in 14.304 shall apply to late receipt of offerors’ requests for wage determinations for additional places of performance. However, late receipt of an offeror’s request for a wage determination for additional places of performance does not preclude the offeror’s competing for the proposed acquisition.

(d) If the contracting officer receives any timely requests for wage determinations for additional places of performance the contracting officer shall

(1) Obtain wage determinations for the additional places of performance; and

(2) Amend the solicitation to include all wage determinations and, if necessary, extend the time for submission of final offers.

(e) If the successful offeror did not make a timely request for a wage determination and will perform in a place of performance for which the contracting officer therefore did not request a wage determination, the contracting officer shall

(1) Award the contract;

(2) Obtain a wage determination; and

(3) Incorporate the wage determination in the contract, retroactive to the date of contract award and with no adjustment in contract price, pursuant to the clause at 52.222-49, Service Contract Labor Standards–Place of Performance Unknown.

22.1010 Notification to interested parties under collective bargaining agreements.

(a) The contracting officer should determine whether the incumbent prime contractor’s or its subcontractors’ service employees performing on the current contract are represented by a collective bargaining agent. If there is a collective bargaining agent, the contracting officer shall give both the incumbent contractor and its employees’ collective bargaining agent written notification of

(1) The forthcoming successor contract and the applicable acquisition dates (issuance of solicitation, opening of bids, commencement of negotiations, award of contract, or start of performance, as the case may be); or

(2) The forthcoming contract modification and applicable acquisition dates (exercise of option, extension of contract, change in scope, or start of performance, as the case may be); or

(3) The forthcoming multiple year contract anniversary date (annual anniversary date or biennial date, as the case may be).

(b) This written notification must be given at least 30 days in advance of the earliest applicable acquisition date or the applicable annual or biennial anniversary date in order for the time-ofreceipt limitations in paragraphs 22.1012-2(a) and (b) to apply. The contracting officer shall retain a copy of the notification in the contract file.

22.1011 [Reserved]

22.1012 Applicability of revisions to wage determinations.

22.1012-1 Prevailing wage determinations.

(a)(1) The Wage and Hour Administrator may issue revisions to prevailing wage determinations periodically. The need for inclusion of a revised prevailing wage determination in a solicitation, contract or contract modification (see 22.1007) is determined by the date of receipt

of the revised prevailing wage determination by the contracting agency. (Note the distinction between receipt by the agency and receipt by the contracting officer which may occur later.)

(i) For purposes of using WDOL, the time of receipt by the contracting agency shall be the first day of publication of the revised prevailing wage determination on the website.

(ii) For purposes of using the e98 process, the time of receipt by the contracting agency shall be the date the agency receives actual notice of a new or revised prevailing wage determination from the Department of Labor as an e98 response.

(2) In selecting a prevailing wage determination from the WDOL website for use in a solicitation or other contract action, the contracting officer shall monitor the WDOL website to determine whether the applicable wage determination has been revised. Revisions published on the WDOL website or otherwise communicated to the contracting officer within the timeframes prescribed at 22.1012-1(b) and (c) are effective and must be included in the resulting contract. Monitoring can be accomplished by use of the WDOL website’s “Alert Service”.

(b) The following shall apply when contracting by sealed bidding: a revised prevailing wage determination shall not be effective if it is received by the contracting agency less than 10 days before the opening of bids, and the contracting officer finds that there is not reasonable time to incorporate the revision in the solicitation.

(c) For contractual actions other than sealed bidding, a revised prevailing wage determination received by the contracting agency after award of a new contract or a modification as specified in 22.1007(b) shall not be effective provided that the start of performance is within 30 days of the award or the specified modification. If the contract does not specify a start of performance date which is within 30 days of the award or the specified modification, and if contract performance does not commence within 30 days of the award or the specified modification, any revision received by the contracting agency not less than 10 days before commencement of the work shall be effective.

(d) If the contracting officer has submitted an e98 to the Department of Labor requesting a prevailing wage determination and has not received a response within 10 days, the contracting officer shall contact the Wage and Hour Division by telephone to determine when the wage determination can be expected. (The telephone number is provided on the e98 website.)

22.1012-2 Wage determinations based on collective bargaining agreements.

(a) In sealed bidding, a new or changed collective bargaining agreement shall not be effective under 41 U.S.C. 6707(c) if the contracting agency has received notice of the terms of the new or changed collective bargaining agreement less than 10 days before bid opening and the contracting officer determines that there is not reasonable time to incorporate the new or changed terms of the collective bargaining agreement in the solicitation.

(b) For contractual actions other than sealed bidding, a new or changed collective bargaining agreement shall not be effective under 41 U.S.C. 6707(c) if notice of the terms of the new or changed collective bargaining agreement is received by the contracting agency after award of a successor contract or a modification as specified in 22.1007(b), provided that the contract start of performance is within 30 days of the award of the contract or of the specified modification. If the contract does not specify a start of performance date which is within 30 days of the award of the contract or of the specified modification, or if contract performance does not commence within 30 days of the award of the contract or of the specified modification, any notice of the terms of a

new or changed collective bargaining agreement received by the agency not less than 10 days before commencement of the work shall be effective for purposes of the successor contract under 41 U.S.C. 6707(c).

(c) The limitations in paragraphs (a) and (b) of this subsection shall apply only if timely notification required in 22.1010 has been given.

(d) If the contracting officer has submitted an e98 to Department of Labor requesting a wage determination based on a collective bargaining agreement and has not received a response from the Department of Labor within 10 days, the contracting officer shall contact the Wage and Hour Division by telephone to determine when the wage determination can be expected. (The telephone number is provided on the e98 website.) If the Department of Labor is unable to provide the wage determination by the latest date needed to maintain the acquisition schedule, the contracting officer shall incorporate the collective bargaining agreement itself in a solicitation or other contract action (e.g., exercise of option) and include a wage determination referencing that collective bargaining agreement created by use of the WDOL website (see 22.1008-1(d)(2)).

22.1013 Review of wage determination.

(a) Based on incumbent collective bargaining agreement. (1) If wages, fringe benefits, or periodic increases provided for in a collective bargaining agreement vary substantially from those prevailing for similar services in the locality, the contracting officer shall immediately contact the agency labor advisor to consider instituting the procedures in 22.1021

(1) If the contracting officer believes that an incumbent or predecessor contractor’s agreement was not the result of arm’s length negotiations, the contracting officer shall contact the agency labor advisor to determine appropriate action.

(b) Based on other than incumbent collective bargaining agreement. Upon receiving a wage determination not predicated upon a collective bargaining agreement, the contracting officer shall ascertain

(1) If the wage determination does not conform with wages and fringe benefits prevailing for similar services in the locality; or

(2) If the wage determination contains significant errors or omissions. If either subparagraph (b)(1) or (b)(2) of this section is evident, the contracting officer shall contact the agency labor advisor to determine appropriate action.

22.1014 Delay over 60 days in bid opening or commencement of work.

If a wage determination was obtained through the e98 process, and bid opening, or commencement of work under a negotiated contract has been delayed, for whatever reason, more than 60 days from the date indicated on the previously submitted e98, the contracting officer shall submit a new e98. Any revision of a wage determination received by the contracting agency as a result of that communication shall supersede the earlier response as the wage determination applicable to the particular acquisition subject to the time frames in 22.1012-1(b) and (c).

22.1015 Discovery of errors by the Department of Labor.

If the Department of Labor discovers and determines, whether before or after a contract award, that a contracting officer made an erroneous determination that the Service Contract Labor

Standards statute did not apply to a particular acquisition or failed to include an appropriate wage determination in a covered contract, the contracting officer, within 30 days of notification by the Department of Labor, shall include in the contract the clause at 52.222-41 and any applicable wage determination issued by the Administrator. If the contract is subject to 41 U.S.C. 6707(c), the Administrator may require retroactive application of that wage determination. The contracting officer shall equitably adjust the contract price to reflect any changed cost of performance resulting from incorporating a wage determination or revision.

22.1016 Statement of equivalent rates for Federal hires.

(a) The statement required under the clause at 52.222-42, Statement of Equivalent Rates for Federal Hires, (see 22.1006(b)) shall set forth those wage rates and fringe benefits that would be paid by the contracting activity to the various classes of service employees expected to be utilized under the contract if 5 U.S.C. 5332 (General Schedule white collar) and/or 5 U.S.C. 5341 (Wage Board blue collar) were applicable.

(b) Procedures for computation of these rates are as follows:

(1) Wages paid blue collar employees shall be the basic hourly rate for each class. The rate shall be Wage Board pay schedule step two for nonsupervisory service employees and step three for supervisory service employees.

(2) Wages paid white collar employees shall be an hourly rate for each class. The rate shall be obtained by dividing the general pay schedule step one biweekly rate by 80.

(3) Local civilian personnel offices can assist in determining and providing grade and salary data.

22.1017 [Reserved]

22.1018 Notification to contractors and employees.

The contracting officer shall take the following steps to ensure that service employees are notified of minimum wages and fringe benefits.

(a) As soon as possible after contract award, inform the contractor of the labor standards requirements of the contract relating to the Service Contract Labor Standards statute and of the contractor’s responsibilities under these requirements, unless it is clear that the contractor is fully informed.

(b) At the time of award, furnish the contractor Department of Labor Publication WH-1313, Notice to Employees Working on Government Contracts, for posting at a prominent and accessible place at the worksite before contract performance begins. The publication advises employees of the compensation (wages and fringe benefits) required to be paid or furnished under the Service Contract Labor Standards statute and satisfies the notice requirements in paragraph (g) of the clause at 52.222-41, Service Contract Labor Standards.

22.1019 Additional classes of service employees.

(a) If the contracting officer is aware that contract performance involves classes of service employees not included in the wage determination, the contracting officer shall require the contractor to classify the unlisted classes so as to provide a reasonable relationship

(i.e., appropriate level of skill comparison) between the unlisted classifications and the classifications listed in the determination (see paragraph (c) of the clause at 52.222-41, Service Contract Labor Standards). The contractor shall initiate the conforming procedure before unlisted classes of employees perform contract work. The contractor shall submit Standard Form (SF) 1444, Request For Authorization of Additional Classification and Rate. The contracting officer shall review the proposed classification and rate and promptly submit the completed SF 1444 (which must include information regarding the agreement or disagreement of the employees’ representative or the employees themselves together with the agency recommendation) and all other pertinent information to the Wage and Hour Division. Within 30 days of receipt of the request, the Wage and Hour Division will (1) approve, modify, or disapprove the request when the parties are in agreement or (2) render a final determination in the event of disagreement among the parties. If the Wage and Hour Division will require more than 30 days to take action, it will notify the contracting officer within 30 days of receipt of the request that additional time is necessary.

(b) Some wage determinations will list a series of classes within a job classification family, for example, Computer Operators, level I, II, and III, or Electronic Technicians, level I, II, and III, or Clerk Typist, level I and II. Generally, level I is the lowest level. It is the entry level, and establishment of a lower level through conformance is not permissible. Further, trainee classifications may not be conformed. Helpers in skilled maintenance trades (for example, electricians, machinists, and automobile mechanics) whose duties constitute, in fact, separate and distinct jobs may also be used if listed on the wage determination, but may not be conformed. Conformance may not be used to artificially split or subdivide classifications listed in the wage determination. However, conforming procedures may be used if the work which an employee performs under the contract is not within the scope of any classification listed on the wage determination, regardless of job title. (See 29 CFR 4.152.)

(c) Subminimum rates for apprentices, student learners, and disabled workers are permissible in accordance with paragraph (q) of the clause at 52.222-41, Service Contract Labor Standards.

22.1020 Seniority lists.

If a contract is performed at a Federal facility where employees may be hired/retained by a succeeding contractor, the incumbent prime contractor is required to furnish a certified list of all service employees on the contractor’s or subcontractor’s payroll during the last month of the contract, together with anniversary dates of employment, to the contracting officer no later than 10 days before contract completion. (See paragraph (n) of the clause at 52.222-41, Service Contract Labor Standards.) At the commencement of the succeeding contract, the contracting officer shall provide a copy of the list to the successor contractor for determining employee eligibility for vacation or other fringe benefits which are based upon length of service, including service with predecessor contractors if such benefit is required by an applicable wage determination.

22.1021 Request for hearing.

(a) A contracting agency or other interested party may request a hearing on an issue presented in 22.1013(a). To obtain a hearing for the contracting agency, the contracting officer shall submit a written request through appropriate channels (ordinarily the agency labor advisor) to

Administrator, Wage and Hour Division

U.S. Department of Labor

Washington, DC 20210

(b) A request for a substantial variance hearing shall include sufficient data to show that the rates at issue vary substantially from those prevailing for similar services in the locality. The request shall also include

(1) The number of the wage determinations at issue;

(2) The name of the contracting agency whose contract is involved;

(3) A brief description of the services to be performed under the contract;

(4) The status of the procurement and any estimated procurement dates, such as bid opening, contract award, and commencement date of the contract or its follow-up option period;

(5) A statement of the applicant’s case, setting forth in detail the reasons why the applicant believes that a substantial variance exists with respect to some or all of the wages and/or fringe benefits;

(6) Names and addresses (to the extent known) of interested parties; and

(7) Any other data required by the Administrator.

(1) A statement of the applicant’s case, setting forth in detail the reasons why the applicant believes that the wages and fringe benefits contained in the collective bargaining agreement were not reached as a result of arm’s length negotiations;

(2) A statement regarding the status of the procurement and any estimated procurement dates, such as bid opening, contract award, and commencement date of the contract or its followup option period; and

(3) Names and addresses (to the extent known) of interested parties.

(d) Unless the Administrator determines that extraordinary circumstances exist, the Administrator will not consider requests for a hearing unless received as follows:

(1) For sealed bid contracts, more than 10 days before the award of the contract; or

(2) For negotiated contracts and for contracts with provisions exceeding the initial term by option, before the commencement date of the contract or the follow-up option period.

22.1022 Withholding of contract payments.

Any violations of the clause at 52.222-41, Service Contract Labor Standards, as amended, renders the responsible contractor liable for the amount of any deductions, rebates, refunds, or underpayments (which includes nonpayment) of compensation due employees performing the contract. The contracting officer may withhold or, upon written request of the Department of Labor from a level no lower than that of Deputy Regional Administrator, Wage and Hour Division, Department of Labor, shall withhold the amount needed to pay such underpaid employees from accrued payments due the contractor on the contract, or on any other prime contract (whether subject to the Service Contract Labor Standards statute or not) with the contractor. The agency shall place the amount withheld in a deposit fund. Such withheld funds shall be transferred to the Department of Labor for disbursement to the underpaid employees on order of the Secretary (or authorized representatives), and Administrative Law Judge, or the Administrative Review Board. In addition, the Department of Labor has given blanket approval to forward withheld funds pending completion of an investigation or other administrative

proceeding when disposition of withheld funds remains the final action necessary to close out a contract.

22.1023 Termination for default.

As provided by the Service Contract Labor Standards statute, any contractor failure to comply with the requirements of the contract clauses related to the Service Contract Labor Standards statute may be grounds for termination for default (see paragraph (k) of the clause at 52.222-41, Service Contract Labor Standards).

22.1024 Cooperation with the Department of Labor.

The contracting officer shall cooperate with Department of Labor representatives in the examination of records, interviews with service employees, and all other aspects of investigations undertaken by the Department. When asked, agencies shall furnish the Wage and Hour Administrator or a designee, any available information on contractors, subcontractors, their contracts, and the nature of the contract services. The contracting officer shall promptly refer, in writing to the appropriate regional office of the Department, apparent violations and complaints received. Employee complaints shall not be disclosed to the employer.

22.1025 Ineligibility of violators.

A list of persons or firms found to be in violation of the Service Contract Labor Standards statute is contained in the System for Award Management Exclusions (see 9.404). No Government contract may be awarded to any violator so listed because of a violation of the Service Contract Labor Standards statute, or to any firm, corporation, partnership, or association in which the violator has a substantial interest, without the approval of the Secretary of Labor. This prohibition against award to an ineligible contractor applies to both prime and subcontracts.

22.1026 Disputes concerning labor standards.

Disputes concerning labor standards requirements of the contract are handled under paragraph (t) of the contract clause at 52.222-41, Service Contract Labor Standards, and not under the clause at 52.233-1, Disputes.

Title 48: Federal Acquisition Regulations System PART 22 APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

Subpart 22.12 Nondisplacement of Qualified Workers Under Service Contracts

Contents

22.1200 Scope of subpart.

22.1201 Definitions.

22.1202 Policy.

22.1203 Applicability.

22.1203-1 General.

22.1203-2 Exemptions.

22.1203-3 Waiver.

22.1203-4 Method of job offer.

22.1203-5 Exceptions.

22.1203-6 Reduced staffing.

22.1204 Certified service employee lists.

22.1205 Notification to contractors and service employees.

22.1206 Remedies and sanctions for violations of this subpart.

22.1207 Contract clause.

SOURCE: 77 FR 75776, Dec. 21, 2012, unless otherwise noted.

22.1200 Scope of subpart.

This subpart prescribes policies and procedures for implementing Executive Order 13495 of January 30, 2009, Nondisplacement of Qualified Workers Under Service Contracts, and related Secretary of Labor regulations and instructions (see 29 CFR part 9).

22.1201 Definitions.

As used in this subpart

United States means the 50 States, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, Guam, the U.S. Virgin Islands, Johnston Island, Wake Island, and outer Continental Shelf as defined in the Outer Continental Shelf Lands Act (43 U.S.C. 1331, et seq.), but does not include any other place subject to United States jurisdiction or any United States base or possession in a foreign country (see 29 CFR 4.112).

22.1202 Policy.

(a) When a service contract succeeds a contract for performance of the same or similar services, as defined at 29 CFR 9.2, at the same location, the successor contractor and its subcontractors are required to offer those service employees that are employed under the predecessor contract, and whose employment will be terminated as a result of the award of the successor contract, a right of first refusal of employment under the contract in positions for which they are qualified. Executive Order 13495 generally prohibits employment openings under the successor contract until such right of first refusal has been provided, when consistent with applicable law.

(b) Nothing in Executive Order 13495 shall be construed to permit a contractor or subcontractor to fail to comply with any provision of any other Executive order or law. For example, the requirements of the HUBZone Program (see subpart 19.13), Executive Order 11246 (Equal Employment Opportunity), and the Vietnam Era Veterans' Readjustment Assistance Act of 1974 may, in certain circumstances, conflict with the requirements of Executive Order 13495. All applicable laws and Executive orders must be satisfied in tandem with, and if necessary prior to, the requirements of Executive Order 13495 and this subpart.

22.1203 Applicability.

22.1203-1 General.

This subpart applies to service contracts that succeed contracts for the same or similar services (29 CFR 9.2) at the same location.

22.1203-2 Exemptions.

(a) This subpart does not apply to

(1) Contracts and subcontracts under the simplified acquisition threshold;

(2) Contracts or subcontracts awarded pursuant to 41 U.S.C. chapter 85, Committee for Purchase from People Who Are Blind or Severely Disabled;

(3) Guard, elevator operator, messenger, or custodial services provided to the Government under contracts or subcontracts with sheltered workshops employing the “severely handicapped” as described in 40 U.S.C. 593;

(4) Agreements for vending facilities entered into pursuant to the preference regulations issued under the Randolph Sheppard Act, 20 U.S.C. 107; or

(5) Service employees who were hired to work under a Federal service contract and one or more nonfederal service contracts as part of a single job, provided that the service employees were not deployed in a manner that was designed to avoid the purposes of this subpart.

(b) The exemptions in paragraphs (a)(2) through (a)(4) of this subsection apply when either the predecessor or successor contract has been awarded for services produced or provided by the “severely handicapped.”

22.1203-3 Waiver.

(a) The senior procurement executive of the procuring agency may waive some or all of the provisions of this subpart after determining in writing that the application of this subpart would not serve the purposes of Executive Order 13495 or would impair the ability of the Federal Government to procure services on an economical and efficient basis. Such waivers may be made for a contract, subcontract, or purchase order, or with respect to a class of contracts, subcontracts, or purchase orders. See 29 CFR 9.4(d)(4) for regulatory provisions addressing circumstances in which a waiver could or would not be appropriate. The waiver must be reflected in a written analysis as described in 29 CFR 9.4(d)(4)(i) and must be completed by the contract solicitation date, or the waiver is inoperative. The senior procurement executive shall not redelegate this waiver authority.

(b)(1) When an agency exercises its waiver authority with respect to any contract, subcontract, or purchase order, the contracting officer shall direct the contractor to notify affected workers and their

collective bargaining representative in writing, no later than five business days after the solicitation issuance date, of the agency's determination. The notice shall include facts supporting the determination. The contracting officer's failure to direct that the contractor provide the notice as provided in this subparagraph shall render the waiver decision inoperative, and the contracting officer shall include the clause at 52.222-17 in the solicitation.

(2) Where a contracting agency waives application to a class of contracts, subcontracts, or purchase orders, the contracting officer shall, with respect to each individual solicitation, direct the contractor to notify incumbent workers and their collective bargaining representatives in writing, no later than five business days after each solicitation issuance date, of the agency's determination. The notice shall include facts supporting the determination. The contracting officer's failure to direct that the contractor provide the notice provided in this subparagraph shall render the waiver decision inoperative, and the contracting officer shall include the clause at 52.222-17 in the solicitation.

(3) In addition, the agency shall notify the Department of Labor of its waiver decision and provide the Department of Labor with a copy of its written analysis no later than five business days after the solicitation issuance date (see 29 CFR 9.4(d)(2)). Failure to comply with this notification requirement shall render the waiver decision inoperative, and the contracting officer shall include the clause at 52.222-17 in the solicitation. The waiver decision and related written analysis shall be sent to the following address: U.S. Department of Labor, Wage and Hour Division, Branch of Government Contracts Enforcement, 200 Constitution Avenue, Room S-3006, Washington, DC 20210, or email to: Displaced@dol.gov.

22.1203-4 Method of job offer.

A job offer made by a successor contractor must be a bona fide express offer of employment on the contract. Each bona fide express offer made to a qualified service employee on the predecessor contract must have a stated time limit of not less than 10 days for an employee response. Prior to the expiration of the 10-day period, the contractor is prohibited from offering employment on the contract to any other person, subject to the exceptions at 22.1203-5. Any question concerning an employee's qualifications shall be decided based upon the individual's education and employment history, with particular emphasis on the employee's experience on the predecessor contract, and a contractor may utilize employment screening processes only when such processes are provided for by the contracting agency, are conditions of the service contract, and are consistent with the Executive Order. An offer of employment will be presumed to be bona fide even if it is not for a position similar to the one the employee previously held, but is one for which the employee is qualified, and even if it is subject to different employment terms and conditions, including changes to pay or benefits. (See 29 CFR 9.12(b) for regulatory provisions addressing circumstances in which a bona fide offer of employment can occur.)

22.1203-5 Exceptions.

(a) A successor contractor or its subcontractors are not required to offer employment to any service employee of the predecessor contractor who

(1) Will be retained by the predecessor contractor.

(2) The successor contractor or any of its subcontractors reasonably believes, based on the particular service employee's past performance, has failed to perform suitably on the job. (See 29 CFR 9.12(c)(4) for regulatory provisions addressing circumstances in which this exception would or would not be appropriate.)

(b) A successor contractor or its subcontractors may employ under the contract any of its current service employees who (1) have worked for the successor contractor or its subcontractors for at least three months immediately preceding the commencement of the successor contract, and (2) would otherwise face lay-off or discharge.

(c) The successor contractor bears the responsibility of demonstrating the appropriateness of claiming any of the preceding exceptions and the exemption listed at 22.1203-2(a)(5) involving nonfederal work.

22.1203-6 Reduced staffing.

A successor contractor and its subcontractors may employ fewer service employees than the predecessor contractor employed in connection with performance of the work. Thus, the successor contractor need not offer employment on the contract to all service employees on the predecessor contract, but must offer employment only to the number of eligible service employees the successor contractor believes necessary to meet its anticipated staffing pattern. Where a successor contractor does not initially offer employment to all the predecessor contract service employees, the obligation to offer employment shall continue for 90 days after the successor contractor's first date of performance on the contract. (See 29 CFR 9.12(d) for regulatory provisions addressing circumstances in which reduced staffing can occur.)

22.1204 Certified service employee lists.

(a) Not less than 30 days before completion of the contract, the predecessor contractor is required to furnish to the contracting officer a certified list of the names of all service employees working under the contract and its subcontracts at the time the list is submitted. The certified list must also contain anniversary dates of employment of each service employee under the contract and subcontracts for services. The information on this list is the same as that on the seniority list required by paragraph (n) of the clause at 52.222-41, Service Contract Labor Standards. If there are no changes to the workforce before the predecessor contract is completed, then the predecessor contractor is not required to submit a revised list 10 days prior to completion of performance and the requirements of 52.222-41(n) are met. When there are changes to the workforce after submission of the 30-day list, the predecessor contractor shall submit a revised certified list not less than 10 days prior to performance completion.

(b) Immediately upon receipt of the certified service employee list but not before contract award, the contracting officer shall provide the certified service employee list to the successor contractor, and, if requested, to employees of the predecessor contractor or subcontractors or their authorized representatives.

[77 FR 75776, Dec. 21, 2012, as amended at 79 FR 24208, Apr. 29, 2014]

22.1205 Notification to contractors and service employees.

(a) The contracting officer shall direct that the predecessor contractor provides written notice to service employees of their possible right to an offer of employment with the successor contractor. The written notice shall be

(1) Posted in a conspicuous place at the worksite; or

(2) Delivered to the service employees individually. If such delivery is via email, the notification must result in an electronic delivery receipt or some other reliable confirmation that the intended recipient received the notice.

(b) Contracting officers may advise contractors to provide the notice in Appendix B to 29 CFR chapter 9. Where a significant portion of the predecessor contractor's workforce is not fluent in English, the contractor shall provide the notice in English and the language(s) with which service employees are more familiar. English and Spanish versions of the notice are available on the Department of Labor Web site at http://www.dol.gov/whd/govcontracts.

22.1206 Remedies and sanctions for violations of this subpart.

(a) The Secretary of Labor has the authority to issue orders prescribing appropriate remedies, including, but not limited to, requiring the successor contractor to offer employment, in positions for which the employees are qualified, to service employees from the predecessor contract and payment of wages lost. (See 29 CFR 9.24(a)).

(b) After an investigation (see 29 CFR 9.23) and a determination by the Administrator, Wage and Hour Division, Department of Labor, that lost wages or other monetary relief is due, the Administrator may direct that so much of the accrued payments due on either the contract or any other contract between the contractor and the Government shall be withheld as are necessary to pay the monies due. Upon the final order of the Secretary of Labor that such monies are due, the Administrator may direct that such withheld funds be transferred to the Department of Labor for disbursement. (See 29 CFR 9.24(c)).

(c) If the contracting officer or the Administrator, Wage and Hour Division, Department of Labor, finds that the predecessor contractor has failed to provide the list required by 22.1204, the contracting officer may, in his or her discretion, or on request by the Administrator, suspend contract payment until such time as the contractor provides the list to the contracting officer.

(d) The Secretary of Labor may also suspend or debar a contractor or subcontractor for a period of up to three years for violations of 29 CFR part 9.

22.1207 Contract clause.

The contracting officer shall insert the clause at 52.222-17, Nondisplacement of Qualified Workers, in solicitations and contracts for (1) service contracts, as defined at 22.001, (2) that succeed contracts for performance of the same or similar work at the same location and (3) that are not exempted by 22.1203-2 or waived in accordance with 22.1203-3.

Subpart 22.19 Establishing a Minimum Wage for Contractors

SOURCE: 79 FR 74550, Dec. 15, 2014, unless otherwise noted.

22.1900 Scope of subpart.

This subpart prescribes policies and procedures to implement Executive Order (E.O.) 13658, Establishing a Minimum Wage for Contractors, dated February 12, 2014, and Department of Labor (DOL) implementing regulations at 29 CFR part 10.

22.1901 Definition.

Worker, as used in this subpart, (in accordance with 29 CFR 10.2)

(1) Means any person engaged in performing work on, or in connection with, a contract covered by Executive Order 13658, and

(i) Whose wages under such contract are governed by the Fair Labor Standards Act (29 U.S.C. chapter 8), the Service Contract Labor Standards statute (41 U.S.C. chapter 67), or the Wage Rate Requirements (Construction) statute (40 U.S.C. chapter 31, subchapter IV),

(ii) Other than individuals employed in a bona fide executive, administrative, or professional capacity, as those terms are defined in 29 CFR part 541,

(iii) Regardless of the contractual relationship alleged to exist between the individual and the employer.

(2) Includes workers performing on, or in connection with, the contract whose wages are calculated pursuant to special certificates issued under 29 U.S.C. 214(c).

(3) Also includes any person working on, or in connection with, the contract and individually registered in a bona fide apprenticeship or training program registered with the Department of Labor's Employment and Training Administration, Office of Apprenticeship, or with a State Apprenticeship Agency recognized by the Office of Apprenticeship.

22.1902 Policy.

(a) Pursuant to Executive Order 13658, the minimum hourly wage rate required to be paid to workers performing on, or in connection with, contracts and subcontracts subject to this subpart is at least $10.10 per hour beginning January 1, 2015, and beginning January 1, 2016, and annually thereafter, an amount determined by the Secretary of Labor. The Administrator of the Wage and Hour Division (the Administrator) will notify the public of the new E.O. minimum wage rate at least 90 days before it is to take effect. (See 22.1904.)

(b) Relationship with other wage rates. (1) Nothing in this subpart shall excuse noncompliance with any applicable Federal or State prevailing wage law or any applicable law or municipal ordinance establishing a minimum wage higher than the E.O. minimum wage. However, wage increases under such other laws or municipal ordinances are not subject to price adjustment under this subpart.

(2) The E.O. minimum wage rate applies whenever it is higher than any applicable collective bargaining agreement(s) wage rate.

(c) Application to tipped workers. Policies and procedures in DOL regulations at 29 CFR 10.24(b) and 10.28 address the relationship between the E.O. minimum wage and wages of workers engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.

22.1903 Applicability.

(a) This subpart applies to contracts covered by the Service Contract Labor Standards statute (41 U.S.C. chapter 67, formerly known as the Service Contract Act, subpart 22.10), or the Wage Rate Requirements (Construction) statute (40 U.S.C. chapter 31, Subchapter IV, formerly known as the Davis Bacon Act, subpart 22.4), that require performance in whole or in part within the United States (the 50 states and the District of Columbia). When performance is in part within and in part outside the United States, this subpart applies to the part of the contract that is performed within the United States.

(b)(1) This subpart applies to workers as defined at 22.1901. As provided in that definition

(i) Workers are covered regardless of the contractual relationship alleged to exist between the contractor or subcontractor and the worker;

(ii) Workers with disabilities whose wages are calculated pursuant to special certificates issued under 29 U.S.C. 214(c) are covered; and

(iii) Workers who are registered in a bona fide apprenticeship program or training program registered with the Department of Labor's Employment and Training Administration, Office of Apprenticeship, or with a State Apprenticeship Agency recognized by the Office of Apprenticeship, are covered.

(2) This subpart does not apply to

(i) Fair Labor Standards Act (FLSA)-covered individuals performing in connection with contracts covered by the E.O., i.e., those individuals who perform duties necessary to the performance of the contract, but who are not directly engaged in performing the specific work called for by the contract, and who spend less than 20 percent of their hours worked in a particular workweek performing in connection with such contracts;

(ii) Individuals exempted from the minimum wage requirements of the FLSA under 29 U.S.C. 213(a) and 214(a) and (b), unless otherwise covered by the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute. These individuals include but are not limited to

(A) Learners, apprentices, or messengers whose wages are calculated pursuant to special certificates issued under 29 U.S.C. 214(a);

(B) Students whose wages are calculated pursuant to special certificates issued under 29 U.S.C. 214(b); and

(C) Those employed in a bona fide executive, administrative, or professional capacity (29 U.S.C. 213(a)(1) and 29 CFR part 541).

(c) Agency Labor Advisors, as defined at 22.001, are listed at http://wdol.gov, and are available to provide guidance and assistance with the application of this subpart.

22.1904 Annual Executive Order Minimum Wage Rate.

(a) For the E.O. minimum wage rate that becomes effective on January 1, 2016, and annually thereafter, the Administrator will

(1) Notify the public of the new E.O. minimum wage rate at least 90 days before it becomes effective by publishing a notice in the FEDERAL REGISTER;

(2) Publish and maintain on Wage Determinations OnLine (WDOL), http://www.wdol.gov, or any successor site, the E.O. minimum wage rate; and

(3) Include a general notice on wage determinations which are issued under the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute. The notice will provide information on the E.O. minimum wage and how to obtain annual updates.

(b)(1) The contractor may request a price adjustment only after the effective date of a new annual E.O. minimum wage determination published pursuant to paragraph (a). Prices will be adjusted only for increased labor costs (including subcontractor labor costs) as a result of the annual E.O. minimum wage, and for associated labor costs (including those for subcontractors). Associated labor costs shall include increases or decreases that result from changes in social security and unemployment taxes and workers' compensation insurance, but will not otherwise include any amount for general and administrative costs, overhead, or profit.

(2) The wage rate price adjustment under this clause is the lowest amount calculated by subtracting from the new E.O. wage rate the following: The current E.O. minimum wage rate; the current service or construction wage determination rate under the contract (if the wage rate is applicable to that worker); or the actual wage currently paid the worker. If the amount is zero or below, there will be no increase paid for this worker.

(i) Example 1 New E.O. wage rate is $11.10

Previous E.O. wage rate is $10.70

The current service or construction wage determination rate applicable to this worker under the contract is $10.75

The actual wage currently paid to the worker is $10.80.

(ii) Example 2 New E.O. wage rate is $10.50

Previous E.O. wage rate is $10.10

The current service or construction wage determination rate applicable to this worker under the contract is $10.75

The actual wage currently paid to the worker is $10.80.

Analysis: The calculation is $11.10 − $10.80 = $.30. The price adjustment for this worker is $.30.

Analysis: The calculation is $10.50−$10.80 = −$.30. There is no price adjustment for this worker.

(3) The contracting officer shall not adjust the contract price for any costs other than those identified in paragraph (b)(1) of this section, and shall not provide duplicate price adjustments with any price adjustment under clauses implementing the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute.

[79 FR 74550, Dec. 15, 2014, as amended at 80 FR 75917, Dec. 4, 2015; 81 FR 11992, Mar. 7, 2016]

22.1905 Enforcement of Executive Order Minimum Wage Requirements.

(a) Authority. (1) Section 5 of the E.O. grants the authority for investigating potential violations of, and obtaining compliance with, the E.O. to the Secretary of Labor. The Secretary of Labor, in promulgating the implementing regulations required by Section 4 of the E.O., has assigned this authority to the Administrator. Contracting agencies do not have authority to conduct compliance investigations under 29 CFR part 10 as implemented in this subpart. This does not limit the contracting officer's authority to otherwise enforce the terms and conditions of the contract.

(2) Contracting officers shall withhold payment at the direction of the Administrator.

(3) The contracting officer shall withhold payment, without a request from the Administrator, if the contractor fails to comply with the requirements in paragraph (e)(2) of 52.222-55, Minimum Wages Under Executive Order 13658 to furnish payroll records, until such time as the noncompliance is corrected.

(b) Complaints. (1) Complaints may be filed with the contracting officer or the Administrator by any person, entity, or organization that believes a violation of this subpart has occurred.

(2) The identity of any individual who makes a written or oral statement as a complaint or in the course of an investigation, as well as portions of the statement which would reveal the individual's identity, shall not be disclosed in any manner to anyone other than Federal officials without the prior consent of the individual, unless otherwise authorized by law.

(3) Upon receipt of a complaint, or if notified that the Administrator has received a complaint, the contracting officer shall report the following information, within 14 days, if available without conducting an investigation, to the Department of Labor, Wage and Hour Division, Office of Government Contracts, 200 Constitution Avenue NW., Room S3006, Washington, DC 20210.

(i) The complaint or description of the alleged violation;

(ii) Available statements by the worker, contractor, or any other person regarding the alleged violation;

(iii) Evidence that clause 52.222-55, Minimum Wages Under Executive Order 13658, was included in the contract;

(iv) Information concerning known settlement negotiations between the parties, if applicable; and

(v) Any other relevant facts known to the contracting officer or other information requested by the Wage and Hour Division.

(c) Investigations. Complaints will be investigated by the Administrator, if warranted, in accordance with the procedures in 29 CFR part 10.43.

(d) Remedies and sanctions (1) Unpaid wages. When the Administrator's investigation reveals that a contractor has failed to pay the applicable E.O. minimum wage, the Administrator will notify the contractor and the contracting agency of the unpaid wage violation, and request that the contractor remedy the violation. If the contractor does not remedy the violation, the Administrator may direct withholding of payments due on the contract or any other contract between the contractor and the Federal Government. Upon final decision and direction of the Administrator, the contracting agency shall transfer the withheld funds to the Department of Labor for disbursement in accordance with the procedures at 22.406-9(c).

(2) Antiretaliation. When a contractor has been found to have violated paragraph (i) of clause 52.222-55, Minimum Wages Under Executive Order 13658, the Administrator may provide for relief to the worker in accordance with 29 CFR 10.44.

(3) Debarment. (i) The Department of Labor may initiate debarment proceedings under 29 CFR 10.52 whenever a contractor is found to have disregarded its obligations under 29 CFR part 10.

(ii) Contracting officers shall consider notifying the agency suspending and debarring official in accordance with agency procedures when a contractor commits significant violations of contract terms and conditions related to this subpart.

(4) Retroactive inclusion of contract clause. If a contracting agency fails to include the contract clause in a contract to which the E.O. applies, the contracting agency, on its own initiative or within 15 calendar days of notification by an authorized representative of the Department of Labor, shall incorporate the contract clause in the contract retroactive to commencement of performance under the contract through the exercise of any and all authority that may be needed (including, where necessary, its authority to negotiate or amend, its authority to pay any necessary additional costs, and its authority under any contract provision authorizing changes, cancellation and termination).

[79 FR 74550, Dec. 15, 2014, as amended at 80 FR 75917, Dec. 4, 2015]

22.1906 Contract clause.

Insert the clause at 52.222-55, Minimum Wages Under Executive Order 13658, in solicitations and contracts that include the clause at 52.222-6, Construction Wage Rate Requirements, or 52.222-41, Service Contract Labor Standards, where work is to be performed, in whole or in part, in the United States (the 50 States and the District of Columbia).

Subpart 22.21—Establishing Paid Sick Leave for Federal Contractors.

22.2100 Scope of Subpart.

This subpart prescribes policies and procedures to implement E.O. 13706, Establishing Paid Sick Leave for Federal Contractors, dated September 7, 2015, and Department of Labor implementing regulations at 29 CFR part 13.

22.2101 Definitions.

As used in this subpart (in accordance with 29 CFR 13.2)–

“Accrual year” means the 12-month period during which a contractor may limit an employee’s accrual of paid sick leave to no less than 56 hours (see 29 CFR 13.5(b)(1)).

“Certification issued by a health care provider” has the meaning given in 29 CFR 13.2.

“Employee”–

(1)(i) Means any person engaged in performing work on or in connection with a contract covered by E.O. 13706, and

(A) Whose wages under such contract are governed by the Service Contract Labor Standards statute (41 U.S.C. chapter 67), the Wage Rate Requirements (Construction) statute (40 U.S.C. chapter 31, subchapter IV), or the Fair Labor Standards Act (29 U.S.C. chapter 8),

(B) Including employees who qualify for an exemption from the Fair Labor Standards Act's minimum wage and overtime provisions,

(ii) Includes any person performing work on or in connection with the contract and individually registered in a bona fide apprenticeship or training program registered with the Department of Labor’s Employment and Training Administration, Office of Apprenticeship, or with a State Apprenticeship Agency recognized by the Office of Apprenticeship.

(2)(i) An employee performs on a contract if the employee directly performs the specific services called for by the contract; and

(ii) An employee performs in connection with a contract if the employee’s work activities are necessary to the performance of a contract but are not the specific services called for by the contract.

“Health care provider” has the meaning given in 29 CFR 13.2.

“Multiemployer plan” means a plan to which more than one employer is required to contribute and which is maintained pursuant to one or more collective bargaining agreements between one or more employee organizations and more than one employer.

“Paid sick leave” means compensated absence from employment that is required by E.O. 13706 and 29 CFR part 13.

22.2102 Policy.

(a) The Government shall require contractors to allow employees performing work on or in connection with a contract covered by E.O. 13706 to accrue and use paid sick leave in accordance with the E.O. and 29 CFR part 13.

(b) Interaction with other laws. Nothing in E.O. 13706 or 29 CFR part 13 shall excuse noncompliance with or supersede any applicable Federal or State law, any applicable law or municipal ordinance, or a collective bargaining agreement requiring greater paid sick leave or leave rights than those established under E.O. 13706 and 29 CFR part 13. For additional details regarding interaction with the Service Contract Labor Standards statute, the Wage Rate Requirements (Construction) statute, the Family and Medical Leave Act, and State and local paid sick time laws, see 29 CFR 13.5(f)(2) through (4).

(c) Interaction with paid time off policies. In accordance with 29 CFR 13.5(f)(5)(i), the paid sick leave requirements of E.O. 13706 and 29 CFR part 13 may be satisfied by a contractor's voluntary paid time off policy, whether provided pursuant to a collective bargaining agreement or otherwise, where the voluntary paid time off policy meets or exceeds the requirements. For additional details regarding paid time off policies, see 29 CFR 13.5(f)(5)(ii) and (iii).

(d) Unless otherwise provided in this subpart, compliance is the responsibility of the contractor, and enforcement is the responsibility of the Department of Labor.

22.2103 Applicability.

This subpart applies to–

(a) Contracts that–

(1) Are covered by the Service Contract Labor Standards statute (41 U.S.C. chapter 67, formerly known as the Service Contract Act, subpart 22.10), or the Wage Rate Requirements (Construction) statute (40 U.S.C. chapter 31, Subchapter IV, formerly known as the Davis-Bacon Act, subpart 22.4); and

(2) Require performance in whole or in part within the United States. When performance is in part within and in part outside the United States, this subpart applies to the part of the contract that is performed within the United States; and

(b) Employees performing on or in connection with such contracts whose wages are governed by the Service Contract Labor Standards statute, the Wage Rate Requirements (Construction) statute, or the Fair Labor Standards Act, including employees who qualify for an exemption from the Fair Labor Standards Act’s minimum wage and overtime provisions.

22.2104

Exclusions.

The following are excluded from coverage under this subpart:

(a) Employees performing in connection with contracts covered by the E.O. for less than 20 percent of their work hours in a given workweek. This exclusion is inapplicable to employees performing on contracts covered by the E.O., i.e., those employees directly engaged in performing the specific work called for by the contract, at any point during the workweek (see 29 CFR 13.4(e)).

(b) Until the earlier of the date the agreement terminates or January 1, 2020, employees whose covered work is governed by a collective bargaining agreement ratified before September 30, 2016, that–

(1) Already provides 56 hours (or 7 days, if the agreement refers to days rather than hours) of paid sick time (or paid time off that may be used for reasons related to sickness or health care) each year; or

(2) Provides less than 56 hours (or 7 days, if the agreement refers to days rather than hours) of paid sick time (or paid time off that may be used for reasons related to sickness or health care) each year, provided that each year the contractor provides covered employees with the difference between 56 hours (or 7 days) and the amount provided under the existing agreement in accordance with 29 CFR 13.4(f).

(c) The Government’s unilateral exercise of a pre-negotiated option to renew an existing contract that does not contain the clause at 52.222-62 will not automatically trigger the application of that clause. (See definition of “new contract” at 29 CFR 13.2).

22.2105 Paid sick leave for Federal contractors and subcontractors.

In accordance with 29 CFR 13.5, and by operation of the clause at 52.222-62, Paid Sick Leave Under Executive Order 13706, the following contractor requirements apply:

(a) Accrual.

(1) Contractors are required to permit an employee to accrue not less than 1 hour of paid sick leave for every 30 hours worked on or in connection with a contract covered by the E.O. (see 29 CFR 13.5(a)(1)).

(2) Contractors are required to inform each employee, in writing, of the amount of paid sick leave the employee has accrued but not used no less than once each pay period or each month, whichever interval is shorter, as well as upon a separation from employment and upon reinstatement of paid sick leave, pursuant to 29 CFR 13.5(b)(4) (see 29 CFR 13.5(a)(2)).

(3) Contractors may choose to provide employees with at least 56 hours of paid sick leave at the beginning of each accrual year rather than allowing the employee to accrue such leave based on hours worked over time (see 29 CFR 13.5(a)(3)).

(b) Maximum accrual, carryover, reinstatement, and payment for unused leave.

(1) Contractors may limit the amount of paid sick leave employees are permitted to accrue to not less than 56 hours in each accrual year (see 29 CFR 13.5(b)(1)).

(2) Paid sick leave shall carry over from one accrual year to the next. Paid sick leave carried over from the previous accrual year shall not count toward any limit the contractor sets on annual accrual (see 29 CFR 13.5(b)(2)).

(3) Contractors may limit the amount of paid sick leave an employee is permitted to have available for use at any point to not less than 56 hours (see 29 CFR 13.5(b)(3)).

(4) Contractors are required to reinstate paid sick leave for employees only when rehired by the same contractor within 12 months after a job separation (see 29 CFR 13.5(b)(4)).

(5) Nothing in E.O. 13706 or 29 CFR part 13 requires contractors to make a financial payment to an employee for accrued paid sick leave that has not been used upon a separation from employment. If a contractor nevertheless makes such a payment in an amount equal to or greater than the value of the pay and benefits the employee would have received pursuant to 29 CFR 13.5(c)(3) had the employee used the paid sick leave, the contractor is relieved of the obligation to reinstate an employee’s accrued paid sick leave upon rehiring the employee within 12 months of the separation pursuant to 29 CFR 13.5(b)(4) (see 29 CFR 13.5(b)(5)).

(d) Request for paid sick leave. Contractors are required to permit an employee to use any or all of the employee’s available paid sick leave upon the oral or written request of an employee

that includes information sufficient to inform the contractor that the employee is seeking to be absent from work for a purpose described in 29 CFR 13.5(c) and, to the extent reasonably feasible, the anticipated duration of the leave (see 29 CFR 13.5(d)).

(e) Certification or documentation for leave of 3 or more consecutive full workdays. Contractors may require certification issued by a health care provider to verify the need for paid sick leave used for a purpose described in 29 CFR 13.5(c)(1)(i), (ii), or (iii), or documentation from an appropriate individual or organization to verify the need for paid sick leave used for a purpose described in 29 CFR 13.5(c)(1)(iv), only if the employee is absent for 3 or more consecutive full workdays (see 29 CFR 13.5(e)).

22.2106

Prohibited acts.

In accordance with 29 CFR 13.6, and by operation of the clause at 52.222-62, Paid Sick Leave Under Executive Order 13706, a contractor may not–

(a) Interfere with an employee’s accrual or use of paid sick leave as required by E.O. 13706 or 29 CFR part 13 (see 29 CFR 13.6(a));

(b) Discharge or in any other manner discriminate against any employee for–

(1) Using, or attempting to use, paid sick leave as provided for under E.O. 13706 and 29 CFR part 13;

(2) Filing any complaint, initiating any proceeding, or otherwise asserting any right or claim under E.O. 13706 or 29 CFR part 13;

(3) Cooperating in any investigation or testifying in any proceeding under E.O. 13706 or 29 CFR part 13; or

(4) Informing any other person about his or her rights under E.O. 13706 or 29 CFR part 13 (see 29 CFR 13.6(b)); or

(c) Fail to make and maintain or to make available to authorized representatives of the Wage and Hour Division records for inspection, copying, and transcription as required by 29 CFR 13.25, or otherwise fail to comply with the requirements of 29 CFR 13.25 (see 29 CFR 13.6(c)).

22.2107 Waiver of rights.

Employees cannot waive, nor may contractors induce employees to waive, their rights under E.O. 13706 or 29 CFR part 13 (see 29 CFR 13.7).

22.2108 Multiemployer plans or other funds, plans, or programs.

Contractors may fulfill their obligations under E.O. 13706 and 29 CFR part 13 jointly with other contractors through a multiemployer plan, or may fulfill their obligations through an individual fund, plan, or program (see 29 CFR 13.8).

22.2109 Enforcement of Executive Order 13706 paid sick leave requirements.

(a) Authority. Section 4 of the E.O. grants to the Secretary of Labor the authority for investigating potential violations of, and obtaining compliance with, the E.O. The Secretary of Labor, in promulgating the implementing regulations required by section 3 of the E.O., has assigned this authority to the Administrator of the Wage and Hour Division. Contracting agencies do not have authority to conduct compliance investigations under 29 CFR part 13 as

implemented in this subpart. This does not limit the contracting officer’s authority to otherwise enforce the terms and conditions of the contract.

(b) Complaints.

(1) Complaints are filed with the Administrator of the Wage and Hour Division and may be brought by any person (including the employee), entity, or organization that believes a violation of this subpart has occurred.

(2) The identity of any individual who makes a written or oral statement as a complaint or in the course of an investigation, as well as portions of the statement which would reveal the individual’s identity, shall not be disclosed in any manner to anyone other than Federal officials without the prior consent of the individual, unless otherwise authorized by law.

(3) If the contracting agency receives a complaint or is notified that the Administrator of the Wage and Hour Division has received a complaint, the contracting officer shall report, within 14 days, to the Department of Labor, Wage and Hour Division, Office of Government Contracts, 200 Constitution Avenue N.W., Room S3006, Washington, D.C. 20210, all of the following information that is available without conducting an investigation:

(i) The complaint or description of the alleged violation.

(ii) Available statements by the employee, contractor, or any other person regarding the alleged violation.

(iii) Evidence that clause 52.222-62, Paid Sick Leave Under Executive Order 13706, was included in the contract.

(iv) Information concerning known settlement negotiations between the parties, if applicable.

(v) Any other relevant facts known to the contracting officer or other information requested by the Wage and Hour Division.

(c) Investigations. Complaints will be investigated by the Administrator of the Wage and Hour Division, if warranted, in accordance with the procedures in 29 CFR 13.43.

(d) Remedies and sanctions.

(1) Withholding or suspending payment. The contracting officer shall, upon his or her own action or upon written request of the Administrator of the Wage and Hour Division–

(i)(A) Withhold or cause to be withheld from the contractor under the contract covered by the E.O. or any other Federal contract with the same contractor, so much of the accrued payments or advances as may be considered necessary to pay employees the full amount owed to compensate for any violation of E.O. 13706 or 29 CFR part 13; and

(B) In the event of any such violation, the contracting agency may, after authorization or by direction of the Administrator of the Wage and Hour Division and written notification to the contractor, take action to cause suspension of any further payment, advance, or guarantee of funds until such violations have ceased; or

(ii) Take action to cause suspension of any further payment, advance, or guarantee of funds to a contractor that has failed to make available for inspection, copying, and transcription any of the records identified in 29 CFR 13.25.

(2) Civil actions to recover greater underpayments than those withheld.

(i) If the payments withheld under 29 CFR 13.11(c) are insufficient to reimburse all monetary relief due, or if there are no payments to withhold, the Department of Labor, following a final order of the Secretary of Labor, may bring an action against the contractor in any court of competent jurisdiction to recover the remaining amount.

(ii) The Department of Labor shall, to the extent possible, pay any sums it recovers in this manner directly to the employees who suffered the violation(s) of 29 CFR 13.6(a) or (b).

(iii) Any sum not paid to an employee because of inability to do so within 3 years shall be transferred into the Treasury of the United States as miscellaneous receipts.

(3) Termination. Contracting officers may consider the failure of a contractor to comply with the requirements of E.O. 13706 or 29 CFR part 13 as grounds for termination for default or cause.

(4) Debarment.

(i) The Department of Labor may initiate debarment proceedings under 29 CFR 13.44(d) and 29 CFR 13.52 whenever a contractor is found to have disregarded its obligations under E.O. 13706 or 29 CFR part 13.

(5) Remedies for interference.

(i) When the Administrator of the Wage and Hour Division determines that a contractor has interfered with an employee’s accrual or use of paid sick leave in violation of 29 CFR 13.6(a), the Administrator of the Wage and Hour Division will notify the contractor and the relevant contracting agency of the interference and request that the contractor remedy the violation.

(ii) If the contractor does not remedy the violation, the Administrator of the Wage and Hour Division shall direct the contractor to provide any appropriate relief to the affected employee(s) in the investigative findings letter issued pursuant to 29 CFR 13.51. Such relief may include–

(A) Any pay and/or benefits denied or lost by reason of the violation;

(B) Other actual monetary losses sustained as a direct result of the violation; or

(iii) Payment of liquidated damages in an amount equaling any monetary relief may also be directed unless such amount is reduced by the Administrator of the Wage and Hour Division because the violation was in good faith and the contractor had reasonable grounds for believing it had not violated the E.O. or 29 CFR part 13.

(iv) The Administrator of the Wage and Hour Division may additionally direct that payments due on the contract or any other contract between the contractor and the Federal Government be withheld as may be necessary to provide any appropriate monetary relief. Upon the final order of the Secretary of Labor that monetary relief is due, the Administrator of the Wage and Hour Division may direct the relevant contracting agency to transfer the withheld funds to the Department of Labor for disbursement.

(6) Remedies for discrimination.

(i) When the Administrator of the Wage and Hour Division determines that a contractor has discriminated against an employee in violation of 29 CFR 13.6(b), the Administrator of the Wage and Hour Division will notify the contractor and the relevant contracting agency of the discrimination and request that the contractor remedy the violation.

(ii) If the contractor does not remedy the violation, the Administrator of the Wage and Hour Division shall direct the contractor to provide appropriate relief to the affected employee(s)

in the investigative findings letter issued pursuant to 29 CFR 13.51. Such relief may include, but is not limited to–

(A) Employment;

(B) Reinstatement;

(D) Restoration of leave, or lost pay and/or benefits.

(7) Recordkeeping. When a contractor fails to make, maintain, or protect records; or produce records when requested by authorized representatives of the Administrator of the Wage and Hour Division, or otherwise comply with the requirements of 29 CFR 13.25 in violation of 29 CFR 13.6(c), the Administrator of the Wage and Hour Division will request that the contractor remedy the violation. If the contractor fails to produce required records upon request, the contracting officer shall, upon his or her own action or upon direction of an authorized representative of the Department of Labor, take such action as may be necessary to cause suspension of any further payment, advance, or guarantee of funds on the contract until such time as the violations are discontinued.

(e) Inclusion of contract clause. If a contracting agency fails to include the clause at FAR 52.222-62 in a contract to which the E.O. applies, the contracting officer, on his or her own initiative or within 15 days of notification by an authorized representative of the Department of Labor, shall incorporate the contract clause in the contract retroactive to commencement of performance under the contract through the exercise of any and all authority that may be needed (including, where necessary, its authority to negotiate or amend, its authority to pay any necessary additional costs, and its authority under any contract provision authorizing changes, cancellation, and termination).

22.2110 Contract clause.

Insert the clause at 52.222-62, Paid Sick Leave Under Executive Order 13706, in solicitations and contracts that include the clause at 52.222-6, Construction Wage Rate Requirements, or 52.222-41, Service Contract Labor Standards, where work is to be performed, in whole or in part, in the United States (the 50 States and the District of Columbia).

Title 48: Federal Acquisition Regulations System

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 52.2 Text of Provisions and Clauses

52.222-41 Service Contract Labor Standards.

As prescribed in 22.1006(a), insert the following clause:

SERVICE CONTRACT LABOR STANDARDS (MAY

2014)

(a) Definitions. As used in this clause

Contractor when this clause is used in any subcontract, shall be deemed to refer to the subcontractor, except in the term “Government Prime Contractor.”

Service employee means any person engaged in the performance of this contract other than any person employed in a bona fide executive, administrative, or professional capacity, as these terms are defined in part 541 of title 29, Code of Federal Regulations, as revised. It includes all such persons regardless of any contractual relationship that may be alleged to exist between a Contractor or subcontractor and such persons.

(b) Applicability. This contract is subject to the following provisions and to all other applicable provisions of 41 U.S.C. chapter 67, Service Contract Labor Standards, and regulations of the Secretary of Labor (29 CFR part 4). This clause does not apply to contracts or subcontracts administratively exempted by the Secretary of Labor or exempted by 41 U.S.C. 6702, as interpreted in subpart C of 29 CFR part 4.

(c) Compensation. (1) Each service employee employed in the performance of this contract by the Contractor or any subcontractor shall be paid not less than the minimum monetary wages and shall be furnished fringe benefits 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 this contract.

(2)(i) If a wage determination is attached to this contract, the Contractor shall classify any class of service employee which is not listed therein and which is to be employed under the contract (i.e., the work to be performed is not performed by any classification listed in the wage determination) so as to provide a reasonable relationship (i.e., appropriate level of skill comparison) between such unlisted classifications and the classifications listed in the wage determination. Such conformed class of employees shall be paid the monetary wages and furnished the fringe benefits as are determined pursuant to the procedures in this paragraph (c).

(ii) This conforming procedure shall be initiated by the Contractor prior to the performance of contract work by the unlisted class of employee. The Contractor shall submit Standard Form (SF) 1444, Request for Authorization of Additional Classification and Rate, to the Contracting Officer no later than 30 days after the unlisted class of employee performs any contract work. The Contracting Officer shall review the proposed classification and rate and promptly submit the completed SF 1444 (which must include information regarding the agreement or disagreement of the employees' authorized representatives or the employees themselves together with the agency recommendation), and all pertinent information to the Wage and Hour Division, Employment Standards Administration U.S. Department of Labor. The Wage and Hour Division will approve, modify, or disapprove the action or render a final determination in the event of disagreement within 30 days of receipt or will notify the Contracting Officer within 30 days of receipt that additional time is necessary.

(iii) The final determination of the conformance action by the Wage and Hour Division shall be transmitted to the Contracting Officer who shall promptly notify the Contractor of the action taken. Each affected employee shall be furnished by the Contractor with a written copy of such determination or it shall be posted as a part of the wage determination.

(iv)(A) The process of establishing wage and fringe benefit rates that bear a reasonable relationship to those listed in a wage determination cannot be reduced to any single formula. The approach used may vary from wage determination to wage determination depending on the circumstances. Standard wage and salary administration practices which rank various job classifications by pay grade pursuant to point schemes or other job factors may, for example, be relied upon. Guidance may also be obtained from the way different jobs are rated under Federal pay systems (Federal Wage Board Pay System and the General Schedule) or from other wage determinations issued in the same locality. Basic to the establishment of any conformable wage rate(s) is the concept that a pay relationship should be maintained between job classifications based on the skill required and the duties performed.

(B) In the case of a contract modification, an exercise of an option, or extension of an existing contract, or in any other case where a Contractor succeeds a contract under which the classification in question was previously conformed pursuant to paragraph (c) of this clause, a new conformed wage rate and fringe benefits may be assigned to the conformed classification by indexing (i.e., adjusting) the previous conformed rate and fringe benefits by an amount equal to the average (mean) percentage increase (or decrease, where appropriate) between the wages and fringe benefits specified for all classifications to be used on the contract which are listed in the current wage determination, and those specified for the corresponding classifications in the previously applicable wage determination. Where conforming actions are accomplished in accordance with this paragraph prior to the performance of contract work by the unlisted class of employees, the Contractor shall advise the Contracting Officer of the action taken but the other procedures in subdivision (c)(2)(ii) of this clause need not be followed.

(C) No employee engaged in performing work on this contract shall in any event be paid less than the currently applicable minimum wage specified under section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended.

(v) The wage rate and fringe benefits finally determined under this subparagraph (c)(2) of this clause shall be paid to all employees performing in the classification from the first day on which contract work is performed by them in the classification. Failure to pay the unlisted employees the compensation agreed upon by the interested parties and/or finally determined by the Wage and Hour Division retroactive to the date such class of employees commenced contract work shall be a violation of the Service Contract Labor Standards statute and this contract.

(vi) Upon discovery of failure to comply with subparagraph (c)(2) of this clause, the Wage and Hour Division shall make a final determination of conformed classification, wage rate, and/or fringe benefits which shall be retroactive to the date such class or classes of employees commenced contract work.

(3) Adjustment of Compensation. If the term of this contract is more than 1 year, the minimum monetary wages and fringe benefits required to be paid or furnished thereunder to service employees under this contract shall be subject to adjustment after 1 year and not less often than once every 2 years, under wage determinations issued by the Wage and Hour Division.

(d) Obligation to Furnish Fringe Benefits. The Contractor or subcontractor may discharge the obligation to furnish fringe benefits specified in the attachment or determined under subparagraph (c)(2) of this clause by furnishing equivalent combinations of bona fide fringe benefits, or by making equivalent or differential cash payments, only in accordance with subpart D of 29 CFR part 4.

(e) Minimum Wage. In the absence of a minimum wage attachment for this contract, neither the Contractor nor any subcontractor under this contract shall pay any person performing work under this

contract (regardless of whether the person is a service employee) less than the minimum wage specified by section 6(a)(1) of the Fair Labor Standards Act of 1938. Nothing in this clause shall relieve the Contractor or any subcontractor of any other obligation under law or contract for payment of a higher wage to any employee.

(f) Successor Contracts. If this contract succeeds a contract subject to the Service Contract Labor Standards statute under which substantially the same services were furnished in the same locality and service employees were paid wages and fringe benefits provided for in a collective bargaining agreement, in the absence of the minimum wage attachment for this contract setting forth such collectively bargained wage rates and fringe benefits, neither the Contractor nor any subcontractor under this contract shall pay any service employee performing any of the contract work (regardless of whether or not such employee was employed under the predecessor contract), less than the wages and fringe benefits provided for in such collective bargaining agreement, to which such employee would have been entitled if employed under the predecessor contract, including accrued wages and fringe benefits and any prospective increases in wages and fringe benefits provided for under such agreement. No Contractor or subcontractor under this contract may be relieved of the foregoing obligation unless the limitations of 29 CFR 4.1b(b) apply or unless the Secretary of Labor or the Secretary's authorized representative finds, after a hearing as provided in 29 CFR 4.10 that the wages and/or fringe benefits provided for in such agreement are substantially at variance with those which prevail for services of a character similar in the locality, or determines, as provided in 29 CFR 4.11, that the collective bargaining agreement applicable to service employees employed under the predecessor contract was not entered into as a result of arm's length negotiations. Where it is found in accordance with the review procedures provided in 29 CFR 4.10 and/or 4.11 and parts 6 and 8 that some or all of the wages and/or fringe benefits contained in a predecessor Contractor's collective bargaining agreement are substantially at variance with those which prevail for services of a character similar in the locality, and/or that the collective bargaining agreement applicable to service employees employed under the predecessor contract was not entered into as a result of arm's length negotiations, the Department will issue a new or revised wage determination setting forth the applicable wage rates and fringe benefits. Such determination shall be made part of the contract or subcontract, in accordance with the decision of the Administrator, the Administrative Law Judge, or the Administrative Review Board, as the case may be, irrespective of whether such issuance occurs prior to or after the award of a contract or subcontract (53 Comp. Gen. 401 (1973)). In the case of a wage determination issued solely as a result of a finding of substantial variance, such determination shall be effective as of the date of the final administrative decision.

(g) Notification to Employees. The Contractor and any subcontractor under this contract shall notify each service employee commencing work on this contract of the minimum monetary wage and any fringe benefits required to be paid pursuant to this contract, or shall post the wage determination attached to this contract. The poster provided by the Department of Labor (Publication WH 1313) shall be posted in a prominent and accessible place at the worksite. Failure to comply with this requirement is a violation of 41 U.S.C. 6703 and of this contract.

(h) Safe and Sanitary Working Conditions. The Contractor or subcontractor shall not permit any part of the services called for by this contract to be performed in buildings or surroundings or under working conditions provided by or under the control or supervision of the Contractor or subcontractor which are unsanitary, hazardous, or dangerous to the health or safety of the service employees. The Contractor or subcontractor shall comply with the safety and health standards applied under 29 CFR part 1925.

(i) Records. (1) The Contractor and each subcontractor performing work subject to the Service Contract Labor Standards statute shall make and maintain for 3 years from the completion of the work, and make them available for inspection and transcription by authorized representatives of the Wage and Hour Division, Employment Standards Administration, a record of the following:

(i) For each employee subject to the Service Contract Labor Standards statute

(A) Name and address and social security number;

(B) Correct work classification or classifications, rate or rates of monetary wages paid and fringe benefits provided, rate or rates of payments in lieu of fringe benefits, and total daily and weekly compensation;

(D) Any deductions, rebates, or refunds from the total daily or weekly compensation of each employee.

(ii) For those classes of service employees not included in any wage determination attached to this contract, wage rates or fringe benefits determined by the interested parties or by the Administrator or authorized representative under the terms of paragraph (c) of this clause. A copy of the report required by subdivision (c)(2)(ii) of this clause will fulfill this requirement.

(iii) Any list of the predecessor Contractor's employees which had been furnished to the Contractor as prescribed by paragraph (n) of this clause.

(2) The Contractor shall also make available a copy of this contract for inspection or transcription by authorized representatives of the Wage and Hour Division.

(3) Failure to make and maintain or to make available these records for inspection and transcription shall be a violation of the regulations and this contract, and in the case of failure to produce these records, the Contracting Officer, upon direction of the Department of Labor and notification to the Contractor, shall take action to cause suspension of any further payment or advance of funds until the violation ceases.

(4) The Contractor shall permit authorized representatives of the Wage and Hour Division to conduct interviews with employees at the worksite during normal working hours.

(j) Pay Periods. The Contractor shall unconditionally pay to each employee subject to the Service Contract Labor Standards statute all wages due free and clear and without subsequent deduction (except as otherwise provided by law or Regulations, 29 CFR part 4), rebate, or kickback on any account. These payments shall be made no later than one pay period following the end of the regular pay period in which the wages were earned or accrued. A pay period under this statute may not be of any duration longer than semi-monthly.

(k) Withholding of Payments and Termination of Contract. The Contracting Officer shall withhold or cause to be withheld from the Government Prime Contractor under this or any other Government contract with the Prime Contractor such sums as an appropriate official of the Department of Labor requests or such sums as the Contracting Officer decides may be necessary to pay underpaid employees employed by the Contractor or subcontractor. In the event of failure to pay any employees subject to the Service Contract Labor Standards statute all or part of the wages or fringe benefits due under the Service Contract Labor Standards statute, the Contracting Officer may, after authorization or by direction of the Department of Labor and written notification to the Contractor, take action to cause suspension of any further payment or advance of funds until such violations have ceased. Additionally, any failure to comply with the requirements of this clause may be grounds for termination of the right to proceed with the contract work. In such event, the Government may enter into other contracts or arrangements for completion of the work, charging the Contractor in default with any additional cost.

(l) Subcontracts. The Contractor agrees to insert this clause in all subcontracts subject to the Service Contract Labor Standards statute.

(m) Collective Bargaining Agreements Applicable to Service Employees. If wages to be paid or fringe benefits to be furnished any service employees employed by the Government Prime Contractor or any subcontractor under the contract are provided for in a collective bargaining agreement which is or will be effective during any period in which the contract is being performed, the Government Prime Contractor shall report such fact to the Contracting Officer, together with full information as to the application and accrual of such wages and fringe benefits, including any prospective increases, to service employees engaged in work on the contract, and a copy of the collective bargaining agreement. Such report shall be made upon commencing performance of the contract, in the case of collective bargaining agreements effective at such time, and in the case of such agreements or provisions or amendments thereof effective at a later time during the period of contract performance such agreements shall be reported promptly after negotiation thereof.

(n) Seniority List. Not less than 10 days prior to completion of any contract being performed at a Federal facility where service employees may be retained in the performance of the succeeding contract and subject to a wage determination which contains vacation or other benefit provisions based upon length of service with a Contractor (predecessor) or successor (29 CFR 4.173), the incumbent Prime Contractor shall furnish the Contracting Officer a certified list of the names, of all service employees on the Contractor's or subcontractor's payroll during the last month of contract performance. Such list shall also contain anniversary dates of employment on the contract either with the current or predecessor Contractors of each such service employee. The Contracting Officer shall turn over such list to the successor Contractor at the commencement of the succeeding contract.

(o) Rulings and Interpretations. Rulings and interpretations of the Service Contract Labor Standards statute are contained in Regulations, 29 CFR part 4.

(p) Contractor's Certification. (1) By entering into this contract, the Contractor (and officials thereof) certifies that neither it nor any person or firm who has a substantial interest in the Contractor's firm is a person or firm ineligible to be awarded Government contracts by virtue of the sanctions imposed under 41 U.S.C. 6706.

(2) No part of this contract shall be subcontracted to any person or firm ineligible for award of a Government contract under 41 U.S.C. 6706.

(3) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 U.S.C. 1001.

(q) Variations, Tolerances, and Exemptions Involving Employment. Notwithstanding any of the provisions in paragraphs (b) through (o) of this clause, the following employees may be employed in accordance with the following variations, tolerances, and exemptions, which the Secretary of Labor, pursuant to 41 U.S.C. 6707 prior to its amendment by Pub. L. 92-473, found to be necessary and proper in the public interest or to avoid serious impairment of the conduct of Government business.

(1) Apprentices, student-learners, and workers whose earning capacity is impaired by age, physical or mental deficiency, or injury may be employed at wages lower than the minimum wages otherwise required by 41 U.S.C. 6703(1) without diminishing any fringe benefits or cash payments in lieu thereof required under 41 U.S.C. 6703(2), in accordance with the conditions and procedures prescribed for the employment of apprentices, student-learners, persons with disabilities, and disabled clients of work centers under section 14 of the Fair Labor Standards Act of 1938, in the regulations issued by the Administrator (29 CFR parts 520, 521, 524, and 525).

(2) The Administrator will issue certificates under the statute for the employment of apprentices, student-learners, persons with disabilities, or disabled clients of work centers not subject to the Fair Labor Standards Act of 1938, or subject to different minimum rates of pay under the two statutes, authorizing appropriate rates of minimum wages (but without changing requirements concerning fringe benefits or

supplementary cash payments in lieu thereof), applying procedures prescribed by the applicable regulations issued under the Fair Labor Standards Act of 1938 (29 CFR parts 520, 521, 524, and 525).

(3) The Administrator will also withdraw, annul, or cancel such certificates in accordance with the regulations in 29 CFR parts 525 and 528.

(r) Apprentices. Apprentices will be permitted to work at less than the predetermined rate for the work they perform when they are employed and individually registered in a bona fide apprenticeship program registered with a State Apprenticeship Agency which is recognized by the U.S. Department of Labor, or if no such recognized agency exists in a State, under a program registered with the Office of Apprenticeship and Training, Employer, and Labor Services (OATELS), U.S. Department of Labor. Any employee who is not registered as an apprentice in an approved program shall be paid the wage rate and fringe benefits contained in the applicable wage determination for the journeyman classification of work actually performed. The wage rates paid apprentices shall not be less than the wage rate for their level of progress set forth in the registered program, expressed as the appropriate percentage of the journeyman's rate contained in the applicable wage determination. The allowable ratio of apprentices to journeymen employed on the contract work in any craft classification shall not be greater than the ratio permitted to the Contractor as to his entire work force under the registered program.

(s) Tips. An employee engaged in an occupation in which the employee customarily and regularly receives more than $30 a month in tips may have the amount of these tips credited by the employer against the minimum wage required by 41 U.S.C. 6703(1), in accordance with section 3(m) of the Fair Labor Standards Act and Regulations 29 CFR part 531. However, the amount of credit shall not exceed $1.34 per hour beginning January l, 1981. To use this provision

(1) The employer must inform tipped employees about this tip credit allowance before the credit is utilized;

(2) The employees must be allowed to retain all tips (individually or through a pooling arrangement and regardless of whether the employer elects to take a credit for tips received);

(3) The employer must be able to show by records that the employee receives at least the applicable Service Contract Labor Standards minimum wage through the combination of direct wages and tip credit; and

(4) The use of such tip credit must have been permitted under any predecessor collective bargaining agreement applicable by virtue of 41 U.S.C. 6707(c).

(t) Disputes Concerning Labor Standards. The U.S. Department of Labor has set forth in 29 CFR parts 4, 6, and 8 procedures for resolving disputes concerning labor standards requirements. Such disputes shall be resolved in accordance with those procedures and not the Disputes clause of this contract. Disputes within the meaning of this clause include disputes between the Contractor (or any of its subcontractors) and the contracting agency, the U.S. Department of Labor, or the employees or their representatives.

(End of clause)

[54 FR 19828, May 8, 1989, as amended at 70 FR 33669, June 8, 2005; 72 FR 63082, Nov. 7, 2007; 79 FR 24219, Apr. 29, 2014]

Title 48: Federal Acquisition Regulations System

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 52.2 Text of Provisions and Clauses

52.222-42 Statement of Equivalent Rates for Federal Hires.

As prescribed in 22.1006(b), insert the following clause:

STATEMENT OF EQUIVALENT RATES FOR FEDERAL HIRES (MAY 2014)

In compliance with the Service Contract Labor Standards statute and the regulations of the Secretary of Labor (29 CFR part 4), this clause identifies the classes of service employees expected to be employed under the contract and states the wages and fringe benefits payable to each if they were employed by the contracting agency subject to the provisions of 5 U.S.C. 5341 or 5332.

This Statement is for Information Only: It Is Not a Wage Determination

Employee class Monetary wage Fringe benefits

(End of clause)

[54 FR 19831, May 8, 1989, as amended at 79 FR 24219, Apr. 29, 2014]

Title 48: Federal Acquisition Regulations System

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 52.2 Text of Provisions and Clauses

52.222-43 Fair Labor Standards Act and Service Contract Labor Standards—Price Adjustment (Multiple Year and Option Contracts).

As prescribed in 22.1006(c)(1), insert the following clause:

FAIR LABOR STANDARDS ACT AND SERVICE CONTRACT LABOR STANDARDS—PRICE ADJUSTMENT (MULTIPLE YEAR AND OPTION CONTRACTS) (MAY 2014)

(a) This clause applies to both contracts subject to area prevailing wage determinations and contracts subject to collective bargaining agreements.

(b) The Contractor warrants that the prices in this contract do not include any allowance for any contingency to cover increased costs for which adjustment is provided under this clause.

(c) The wage determination, issued under the Service Contract Labor Standards statute, (41 U.S.C. chapter 67), by the Administrator, Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, current on the anniversary date of a multiple year contract or the beginning of each renewal option period, shall apply to this contract. If no such determination has been made applicable to this contract, then the Federal minimum wage as established by section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended, (29 U.S.C. 206) current on the anniversary date of a multiple year contract or the beginning of each renewal option period, shall apply to this contract.

(d) The contract price, contract unit price labor rates, or fixed hourly labor rates will be adjusted to reflect the Contractor's actual increase or decrease in applicable wages and fringe benefits to the extent that the increase is made to comply with or the decrease is voluntarily made by the Contractor as a result of:

(1) The Department of Labor wage determination applicable on the anniversary date of the multiple year contract, or at the beginning of the renewal option period. For example, the prior year wage determination required a minimum wage rate of $4.00 per hour. The Contractor chose to pay $4.10. The new wage determination increases the minimum rate to $4.50 per hour. Even if the Contractor voluntarily increases the rate to $4.75 per hour, the allowable price adjustment is $.40 per hour;

(2) An increased or decreased wage determination otherwise applied to the contract by operation of law; or

(3) An amendment to the Fair Labor Standards Act of l938 that is enacted after award of this contract, affects the minimum wage, and becomes applicable to this contract under law.

(e) Any adjustment will be limited to increases or decreases in wages and fringe benefits as described in paragraph (d) of this clause, and the accompanying increases or decreases in social security and unemployment taxes and workers' compensation insurance, but shall not otherwise include any amount for general and administrative costs, overhead, or profit.

(f) The Contractor shall notify the Contracting Officer of any increase claimed under this clause within 30 days after receiving a new wage determination unless this notification period is extended in

writing by the Contracting Officer. The Contractor shall promptly notify the Contracting Officer of any decrease under this clause, but nothing in the clause shall preclude the Government from asserting a claim within the period permitted by law. The notice shall contain a statement of the amount claimed and the change in fixed hourly rates (if this is a time-and-materials or labor-hour contract), and any relevant supporting data, including payroll records, that the Contracting Officer may reasonably require. Upon agreement of the parties, the contract price, contract unit price labor rates, or fixed hourly rates shall be modified in writing. The Contractor shall continue performance pending agreement on or determination of any such adjustment and its effective date.

(g) The Contracting Officer or an authorized representative shall have access to and the right to examine any directly pertinent books, documents, papers and records of the Contractor until the expiration of 3 years after final payment under the contract.

(End of clause)

[54 FR 19831, May 8, 1989, as amended at 71 FR 67779, Nov. 22, 2006; 74 FR 40461, Aug. 11, 2009; 79 FR 24219, Apr. 29, 2014]

52.222-55 Minimum Wages Under Executive Order 13658.

As prescribed in 22.1906, insert the following clause:

MINIMUM WAGES UNDER EXECUTIVE ORDER 13658 (DEC

2015)

(a) Definitions. As used in this clause

“United States” means the 50 states and the District of Columbia.

“Worker”

(1) Means any person engaged in performing work on, or in connection with, a contract covered by Executive Order 13658, and

(ii) Other than individuals employed in a bona fide executive, administrative, or professional capacity, as those terms are defined in 29 CFR part 541; and

(iii) Regardless of the contractual relationship alleged to exist between the individual and the employer.

(2) Includes workers performing on, or in connection with, the contract whose wages are calculated pursuant to special certificates issued under 29 U.S.C. 214(c).

(b) Executive Order minimum wage rate. (1) The Contractor shall pay to workers, while performing in the United States, and performing on, or in connection with, this contract, a minimum hourly wage rate of $10.10 per hour beginning January 1, 2015.

(2) The Contractor shall adjust the minimum wage paid, if necessary, beginning January 1, 2016, and annually thereafter, to meet the applicable annual E.O. minimum wage. The Administrator of the Department of Labor's Wage and Hour Division (the Administrator) will publish annual determinations in the FEDERAL REGISTER no later than 90 days before the effective date of the new E.O. minimum wage rate. The Administrator will also publish the applicable E.O. minimum wage on www.wdol.gov (or any successor Web site), and a general notice on all wage determinations issued under the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute, that will provide information on the E.O. minimum wage and how to obtain annual updates. The applicable published E.O. minimum wage is incorporated by reference into this contract.

(3)(i) The Contractor may request a price adjustment only after the effective date of the new annual E.O. minimum wage determination. Prices will be adjusted only for increased labor costs (including subcontractor labor costs) as a result of an increase in the annual E.O. minimum wage, and for associated labor costs (including those for subcontractors). Associated labor costs shall include increases or decreases that result from changes in social security and unemployment taxes and workers'

compensation insurance, but will not otherwise include any amount for general and administrative costs, overhead, or profit.

(ii) Subcontractors may be entitled to adjustments due to the new minimum wage, pursuant to paragraph (b)(2). Contractors shall consider any subcontractor requests for such price adjustment.

(iii) The Contracting Officer will not adjust the contract price under this clause for any costs other than those identified in paragraph (b)(3)(i) of this clause, and will not provide duplicate price adjustments with any price adjustment under clauses implementing the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute.

(4) The Contractor warrants that the prices in this contract do not include allowance for any contingency to cover increased costs for which adjustment is provided under this clause.

(5) A pay period under this clause may not be longer than semi-monthly, but may be shorter to comply with any applicable law or other requirement under this contract establishing a shorter pay period. Workers shall be paid no later than one pay period following the end of the regular pay period in which such wages were earned or accrued.

(6) The Contractor shall pay, unconditionally to each worker, all wages due free and clear without subsequent rebate or kickback. The Contractor may make deductions that reduce a worker's wages below the E.O. minimum wage rate only if done in accordance with 29 CFR 10.23, Deductions.

(7) The Contractor shall not discharge any part of its minimum wage obligation under this clause by furnishing fringe benefits or, with respect to workers whose wages are governed by the Service Contract Labor Standards statute, the cash equivalent thereof.

(8) Nothing in this clause shall excuse the Contractor from compliance with any applicable Federal or State prevailing wage law or any applicable law or municipal ordinance establishing a minimum wage higher than the E.O. minimum wage. However, wage increases under such other laws or municipal ordinances are not subject to price adjustment under this subpart.

(9) The Contractor shall pay the E.O. minimum wage rate whenever it is higher than any applicable collective bargaining agreement(s) wage rate.

(10) The Contractor shall follow the policies and procedures in 29 CFR 10.24(b) and 10.28 for treatment of workers engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.

(c)(1) This clause applies to workers as defined in paragraph (a). As provided in that definition

(i) Workers are covered regardless of the contractual relationship alleged to exist between the contractor or subcontractor and the worker;

(ii) Workers with disabilities whose wages are calculated pursuant to special certificates issued under 29 U.S.C. 214(c) are covered; and

(2) This clause does not apply to

(i) Fair Labor Standards Act (FLSA)-covered individuals performing in connection with contracts covered by the E.O., i.e. those individuals who perform duties necessary to the performance of the contract, but who are not directly engaged in performing the specific work called for by the contract, and who spend less than 20 percent of their hours worked in a particular workweek performing in connection with such contracts;

(ii) Individuals exempted from the minimum wage requirements of the FLSA under 29 U.S.C. 213(a) and 214(a) and (b), unless otherwise covered by the Service Contract Labor Standards statute, or the Wage Rate Requirements (Construction) statute. These individuals include but are not limited to

(A) Learners, apprentices, or messengers whose wages are calculated pursuant to special certificates issued under 29 U.S.C. 214(a).

(B) Students whose wages are calculated pursuant to special certificates issued under 29 U.S.C. 214(b).

(C) Those employed in a bona fide executive, administrative, or professional capacity (29 U.S.C. 213(a)(1) and 29 CFR part 541).

(d) Notice. The Contractor shall notify all workers performing work on, or in connection with, this contract of the applicable E.O. minimum wage rate under this clause. With respect to workers covered by the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute, the Contractor may meet this requirement by posting, in a prominent and accessible place at the worksite, the applicable wage determination under those statutes. With respect to workers whose wages are governed by the FLSA, the Contractor shall post notice, utilizing the poster provided by the Administrator, which can be obtained at www.dol.gov/whd/govcontracts, in a prominent and accessible place at the worksite. Contractors that customarily post notices to workers electronically may post the notice electronically provided the electronic posting is displayed prominently on any Web site that is maintained by the contractor, whether external or internal, and customarily used for notices to workers about terms and conditions of employment.

(e) Payroll Records. (1) The Contractor shall make and maintain records, for three years after completion of the work, containing the following information for each worker:

(i) Name, address, and social security number;

(ii) The worker's occupation(s) or classification(s);

(iii) The rate or rates of wages paid;

(iv) The number of daily and weekly hours worked by each worker;

(v) Any deductions made; and

(vi) Total wages paid.

(2) The Contractor shall make records pursuant to paragraph (e)(1) of this clause available for inspection and transcription by authorized representatives of the Administrator. The Contractor shall also make such records available upon request of the Contracting Officer.

(3) The Contractor shall make a copy of the contract available, as applicable, for inspection or transcription by authorized representatives of the Administrator.

(4) Failure to comply with this paragraph (e) shall be a violation of 29 CFR 10.26 and this contract. Upon direction of the Administrator or upon the Contracting Officer's own action, payment shall be withheld until such time as the noncompliance is corrected.

(5) Nothing in this clause limits or otherwise modifies the Contractor's payroll and recordkeeping obligations, if any, under the Service Contract Labor Standards statute, the Wage Rate Requirements (Construction) statute, the Fair Labor Standards Act, or any other applicable law.

(f) Access. The Contractor shall permit authorized representatives of the Administrator to conduct investigations, including interviewing workers at the worksite during normal working hours.

(g) Withholding. The Contracting Officer, upon his or her own action or upon written request of the Administrator, will withhold funds or cause funds to be withheld, from the Contractor under this or any other Federal contract with the same Contractor, sufficient to pay workers the full amount of wages required by this clause.

(h) Disputes. Department of Labor has set forth in 29 CFR 10.51, Disputes concerning contractor compliance, the procedures for resolving disputes concerning a contractor's compliance with Department of Labor regulations at 29 CFR part 10. Such disputes shall be resolved in accordance with those procedures and not the Disputes clause of this contract. These disputes include disputes between the Contractor (or any of its subcontractors) and the contracting agency, the Department of Labor, or the workers or their representatives.

(i) Antiretaliation. The Contractor shall not discharge or in any other manner discriminate against any worker because such worker has filed any complaint or instituted or caused to be instituted any proceeding under or related to compliance with the E.O. or this clause, or has testified or is about to testify in any such proceeding.

(j) Subcontractor compliance. The Contractor is responsible for subcontractor compliance with the requirements of this clause and may be held liable for unpaid wages due subcontractor workers.

(k) Subcontracts. The Contractor shall include the substance of this clause, including this paragraph (k) in all subcontracts, regardless of dollar value, that are subject to the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute, and are to be performed in whole or in part in the United States.

(End of clause)

[79 FR 74552, Dec. 15, 2014, as amended at 80 FR 75917, Dec. 4, 2015]

Title 48: Federal Acquisition Regulations System

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 52.2 Text of Provisions and Clauses

52.222-62 Paid Sick Leave Under Executive Order 13706.

As prescribed at 22.2110, insert the following clause:

PAID SICK LEAVE UNDER EXECUTIVE ORDER 13706 (JAN 2017)

(a) Definitions. As used in this clause (in accordance with 29 CFR 13.2)

Child, domestic partner, and domestic violence have the meaning given in 29 CFR 13.2.

Employee (1)(i) Means any person engaged in performing work on or in connection with a contract covered by Executive Order (E.O.) 13706; and

(B) Including employees who qualify for an exemption from the Fair Labor Standards Act's minimum wage and overtime provisions;

(ii) Includes any person performing work on or in connection with the contract and individually registered in a bona fide apprenticeship or training program registered with the Department of Labor's Employment and Training Administration, Office of Apprenticeship, or with a State Apprenticeship Agency recognized by the Office of Apprenticeship.

(2)(i) An employee performs “on” a contract if the employee directly performs the specific services called for by the contract; and

(ii) An employee performs “in connection with” a contract if the employee's work activities are necessary to the performance of a contract but are not the specific services called for by the contract.

Individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship has the meaning given in 29 CFR 13.2.

Multiemployer plan means a plan to which more than one employer is required to contribute and which is maintained pursuant to one or more collective bargaining agreements between one or more employee organizations and more than one employer.

Paid sick leave means compensated absence from employment that is required by E.O. 13706 and 29 CFR part 13.

Parent, sexual assault, spouse, and stalking have the meaning given in 29 CFR 13.2.

United States means the 50 States and the District of Columbia.

(b) Executive Order 13706. (1) This contract is subject to E.O. 13706 and the regulations issued by the Secretary of Labor in 29 CFR part 13 pursuant to the E.O.

(2) If this contract is not performed wholly within the United States, this clause only applies with respect to that part of the contract that is performed within the United States.

(1) Permit each employee engaged in performing work on or in connection with this contract to earn not less than 1 hour of paid sick leave for every 30 hours worked;

(2) Allow accrual and use of paid sick leave as required by E.O. 13706 and 29 CFR part 13;

(3) Comply with the accrual, use, and other requirements set forth in 29 CFR 13.5 and 13.6, which are incorporated by reference in this contract;

(4) Provide paid sick leave to all employees when due free and clear and without subsequent deduction (except as otherwise provided by 29 CFR 13.24), rebate, or kickback on any account;

(5) Provide pay and benefits for paid sick leave used no later than one pay period following the end of the regular pay period in which the paid sick leave was taken; and

(6) Be responsible for the compliance by any subcontractor with the requirements of E.O. 13706, 29 CFR part 13, and this clause.

(d) Contractors may fulfill their obligations under E.O. 13706 and 29 CFR part 13 jointly with other contractors through a multiemployer plan, or may fulfill their obligations through an individual fund, plan, or program (see 29 CFR 13.8).

(e) Withholding. The Contracting Officer will, upon his or her own action or upon written request of an authorized representative of the Department of Labor, withhold or cause to be withheld from the Contractor under this or any other Federal contract with the same Contractor, so much of the accrued payments or advances as may be considered necessary to pay employees the full amount owed to compensate for any violation of the requirements of E.O. 13706, 29 CFR part 13, or this clause, including

(1) Any pay and/or benefits denied or lost by reason of the violation;

(2) Other actual monetary losses sustained as a direct result of the violation; and

(3) Liquidated damages.

(f) Payment suspension/contract termination/contractor debarment. (1) In the event of a failure to comply with E.O. 13706, 29 CFR part 13, or this clause, the contracting agency may, on its own action or after authorization or by direction of the Department of Labor and written notification to the Contractor take action to cause suspension of any further payment, advance, or guarantee of funds until such violations have ceased.

(2) Any failure to comply with the requirements of this clause may be grounds for termination for default or cause.

(3) A breach of the contract clause may be grounds for debarment as a contractor and subcontractor as provided in 29 CFR 13.52.

(g) The paid sick leave required by E.O. 13706, 29 CFR part 13, and this clause is in addition to the Contractor's obligations under the Service Contract Labor Standards statute and Wage Rate Requirements (Construction) statute, and the Contractor may not receive credit toward its prevailing wage or fringe benefit obligations under those Acts for any paid sick leave provided in satisfaction of the requirements of E.O. 13706 and 29 CFR part 13.

(h) Nothing in E.O. 13706 or 29 CFR part 13 shall excuse noncompliance with or supersede any applicable Federal or State law, any applicable law or municipal ordinance, or a collective bargaining agreement requiring greater paid sick leave or leave rights than those established under E.O. 13706 and 29 CFR part 13.

(i) Recordkeeping. (1) The Contractor shall make and maintain, for no less than three (3) years from the completion of the work on the contract, records containing the following information for each employee, which the Contractor shall make available upon request for inspection, copying, and transcription by authorized representatives of the Administrator of the Wage and Hour Division of the Department of Labor:

(i) Name, address, and social security number of each employee.

(ii) The employee's occupation(s) or classification(s).

(iii) The rate or rates of wages paid (including all pay and benefits provided).

(iv) The number of daily and weekly hours worked.

(v) Any deductions made.

(vi) The total wages paid (including all pay and benefits provided) each pay period.

(vii) A copy of notifications to employees of the amount of paid sick leave the employee has accrued, as required under 29 CFR 13.5(a)(2).

(viii) A copy of employees' requests to use paid sick leave, if in writing, or, if not in writing, any other records reflecting such employee requests.

(ix) Dates and amounts of paid sick leave taken by employees (unless the Contractor's paid time off policy satisfies the requirements of E.O. 13706 and 29 CFR part 13 as described in 29 CFR 13.5(f)(5), leave shall be designated in records as paid sick leave pursuant to E.O. 13706).

(x) A copy of any written responses to employees' requests to use paid sick leave, including explanations for any denials of such requests, as required under 29 CFR 13.5(d)(3).

(xi) Any records reflecting the certification and documentation the Contractor may require an employee to provide under 29 CFR 13.5(e), including copies of any certification or documentation provided by an employee.

(xii) Any other records showing any tracking of or calculations related to an employee's accrual or use of paid sick leave.

(xiii) The relevant contract.

(xiv) The regular pay and benefits provided to an employee for each use of paid sick leave.

(xv) Any financial payment made for unused paid sick leave upon a separation from employment intended, pursuant to 29 CFR 13.5(b)(5), to relieve the Contractor from the obligation to reinstate such paid sick leave as otherwise required by 29 CFR 13.5(b)(4).

(2)(i) If the Contractor wishes to distinguish between an employee's covered and noncovered work, the Contractor shall keep records or other proof reflecting such distinctions. Only if the Contractor adequately segregates the employee's time will time spent on noncovered work be excluded from hours worked counted toward the accrual of paid sick leave. Similarly, only if the Contractor adequately segregates the employee's time may the Contractor properly refuse an employee's request to use paid sick leave on the ground that the employee was scheduled to perform noncovered work during the time he or she asked to use paid sick leave.

(ii) If the Contractor estimates covered hours worked by an employee who performs work in connection with contracts covered by the E.O. pursuant to 29 CFR 13.5(a)(1)(i) or (iii), the Contractor shall keep records or other proof of the verifiable information on which such estimates are reasonably based. Only if the Contractor relies on an estimate that is reasonable and based on verifiable information will an employee's time spent in connection with noncovered work be excluded from hours worked counted toward the accrual of paid sick leave. If the Contractor estimates the amount of time an employee spends performing in connection with contracts covered by the E.O., the Contractor shall permit the employee to use his or her paid sick leave during any work time for the Contractor.

(3) In the event the Contractor is not obligated by the Service Contract Labor Standards statute, the Wage Rate Requirements (Construction) statute, or the Fair Labor Standards Act to keep records of an employee's hours worked, such as because the employee is exempt from the Fair Labor Standards Act's minimum wage and overtime requirements, and the Contractor chooses to use the assumption permitted by 29 CFR 13.5(a)(1)(iii), the Contractor is excused from the requirement in paragraph (i)(1)(iv) of this clause and 29 CFR 13.25(a)(4) to keep records of the employee's number of daily and weekly hours worked.

(4)(i) Records relating to medical histories or domestic violence, sexual assault, or stalking, created for purposes of E.O. 13706, whether of an employee or an employee's child, parent, spouse, domestic partner, or other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship, shall be maintained as confidential records in separate files/records from the usual personnel files.

(ii) If the confidentiality requirements of the Genetic Information Nondiscrimination Act of 2008 (GINA), section 503 of the Rehabilitation Act of 1973, and/or the Americans with Disabilities Act (ADA) apply to records or documents created to comply with the recordkeeping requirements in this contract clause, the records and documents shall also be maintained in compliance with the confidentiality requirements of the GINA, section 503 of the Rehabilitation Act of 1973, and/or ADA as described in 29 CFR 1635.9, 41 CFR 60-741.23(d), and 29 CFR 1630.14(c)(1), respectively.

(iii) The Contractor shall not disclose any documentation used to verify the need to use 3 or more consecutive days of paid sick leave for the purposes listed in 29 CFR 13.5(c)(1)(iv) (as described in 29 CFR 13.5(e)(1)(ii)) and shall maintain confidentiality about any domestic abuse, sexual assault, or stalking, unless the employee consents or when disclosure is required by law.

(5) The Contractor shall permit authorized representatives of the Wage and Hour Division to conduct interviews with employees at the worksite during normal working hours.

(6) Nothing in this contract clause limits or otherwise modifies the Contractor's recordkeeping obligations, if any, under the Service Contract Labor Standards statute, the Wage Rate Requirements (Construction) statute, the Fair Labor Standards Act, the Family and Medical Leave Act, E.O. 13658, their respective implementing regulations, or any other applicable law.

(j) Interference/discrimination. (1) The Contractor shall not in any manner interfere with an employee's accrual or use of paid sick leave as required by E.O. 13706 or 29 CFR part 13. Interference includes, but is not limited to

(i) Miscalculating the amount of paid sick leave an employee has accrued;

(ii) Denying or unreasonably delaying a response to a proper request to use paid sick leave;

(iii) Discouraging an employee from using paid sick leave;

(iv) Reducing an employee's accrued paid sick leave by more than the amount of such leave used;

(v) Transferring an employee to work on contracts not covered by the E.O. to prevent the accrual or use of paid sick leave;

(vi) Disclosing confidential information contained in certification or other documentation provided to verify the need to use paid sick leave; or

(vii) Making the use of paid sick leave contingent on the employee's finding a replacement worker or the fulfillment of the Contractor's operational needs.

(2) The Contractor shall not discharge or in any other manner discriminate against any employee for

(i) Using, or attempting to use, paid sick leave as provided for under E.O. 13706 and 29 CFR part 13;

(ii) Filing any complaint, initiating any proceeding, or otherwise asserting any right or claim under E.O. 13706 and 29 CFR part 13;

(iii) Cooperating in any investigation or testifying in any proceeding under E.O. 13706 and 29 CFR part 13; or

(iv) Informing any other person about his or her rights under E.O. 13706 and 29 CFR part 13.

(k) Notice. The Contractor shall notify all employees performing work on or in connection with a contract covered by the E.O. of the paid sick leave requirements of E.O. 13706, 29 CFR part 13, and this clause by posting a notice provided by the Department of Labor in a prominent and accessible place at the worksite so it may be readily seen by employees. Contractors that customarily post notices to employees electronically may post the notice electronically, provided such electronic posting is displayed prominently on any Web site that is maintained by the Contractor, whether external or internal, and customarily used for notices to employees about terms and conditions of employment.

(l) Disputes concerning labor standards. Disputes related to the application of E.O. 13706 to this contract shall not be subject to the general disputes clause of the contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR part 13. Disputes within the meaning of this contract clause include disputes between the Contractor (or any of its subcontractors) and the contracting agency, the Department of Labor, or the employees or their representatives.

(m) Subcontracts. The Contractor shall insert the substance of this clause, including this paragraph (m), in all subcontracts, regardless of dollar value, that are subject to the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute, and are to be performed in whole or in part in the United States.

(End of clause)

[81 FR 91634, Dec. 16, 2016]

Title 48: Federal Acquisition Regulations System

PART 222 APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

Subpart 222.4 Labor Standards for Contracts Involving Construction

222.402-70 Installation support contracts.

(a) Apply both the Service Contract Labor Standards statute and the Construction Wage Rate Requirements statute to installation support contracts if

(1) The contract is principally for services but also requires a substantial and segregable amount of construction, alteration, renovation, painting, or repair work; and

(2) The aggregate dollar value of such construction work exceeds or is expected to exceed $2,000.

(b) Service Contract Labor Standards statute coverage under the contract. Contract installation support requirements, such as plant operation and installation services (i.e., custodial, snow removal, etc.) are subject to the Service Contract Labor Standards. Apply Service Contract Labor Standards clauses and minimum wage and fringe benefit requirements to all contract service calls or orders for such maintenance and support work.

(c) Construction Wage Rate Requirements statute coverage under the contract. Contract construction, alteration, renovation, painting, and repair requirements (i.e., roof shingling, building structural repair, paving repairs, etc.) are subject to the Construction Wage Rate Requirements statute. Apply Construction Wage Rate Requirements clauses and minimum wage requirements to all contract service calls or orders for construction, alteration, renovation, painting, or repairs to buildings or other works.

(d) Repairs versus maintenance. Some contract work may be characterized as either Construction Wage Rate Requirements painting/repairs or Service Contract Labor Standards maintenance. For example, replacing broken windows, spot painting, or minor patching of a wall could be covered by either the Construction Wage Rate Requirements or the Service Contract Labor Standards. In those instances where a contract service call or order requires construction trade skills (i.e., carpenter, plumber, painter, etc.), but it is unclear whether the work required is Service Contract Labor Standards maintenance or Construction Wage Rate Requirements painting/repairs, apply the following rules:

(1) Individual service calls or orders which will require a total of 32 or more work hours to perform shall be considered to be repair work subject to the Construction Wage Rate Requirements.

(2) Individual service calls or orders which will require less than 32 work hours to perform shall be considered to be maintenance subject to the Service Contract Labor Standards.

(3) Painting work of 200 square feet or more to be performed under an individual service call or order shall be considered to be subject to the Construction Wage Rate Requirements statute regardless of the total work hours required.

(e) The determination of labor standards application shall be made at the time the solicitation is prepared in those cases where requirements can be identified. Otherwise, the determination shall be made at the time the service call or order is placed against the contract. The service call or order shall identify the labor standards law and contract wage determination which will apply to the work required.

(f) Contracting officers may not avoid application of the Construction Wage Rate Requirements statute by splitting individual tasks between orders or contracts.

[56 FR 36358, July 31, 1991, as amended at 77 FR 35880, June 15, 2012]

• McNamara-O’Hara Service Contract Act of 1965

• Reference List of Pertinent Statutes and Regulations

Amended

US. Department of Labor Employment Standards Administration Wage and Hour Division

WH Publication 1146 Revised July 1978

Material contained in this publication is in the public domain and may be reproduced, full or partially, without permission of the Federal Government. Source credit is requested but not required, Permission is required only to reproduce any copyrighted material contained herein.

This material will be made available to sensory impaired individuals upon request.

Voice phone: 202-523-8347

TDD* phone: 202-523-9530

SERVICE

CONTRACT ACT OF 1965,AS AMENDED ‘

(41 U.S.C. 351, et seq.)

(Revised text1 showing in italics new or amended language provided by Public Law 92-473, as enacted October 9, 1972, and in bold face new or amended language provided by Public Law 94-489, as enacted October 13, 1976. )

AN ACT To provide labor standards for certain persons employed by Federal contractors to furnish services to Federal agencies, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the “Service Contract Act of 1965”.

SEC. 2. (a) Every contract (and any bid specification therefor) entered into by the United States or the District of Columbia in excess of $2,600, except as provided in section 7 of this Act, 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 service employees in the performance of the contract or any subcontract thereunder, as determined by the Secretary, or his 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. In no case shall such wages be lower than the minimum specified in subsection (b).

(2) A provision specifying the fringe benefits to be furnished the various classes of service employees, engaged in tile performance of the contract or any subcontract thereunder, as determined by the Secretary or his authorized representative to be prevailing for such employees in the locality, or, where a collective-bargaining agreement

2358.

covers any such service employees, to be provided for in such agreement, including prospective fringe benefit increases provided for in such agreement, as a result of arm’s-length negotiations. 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 obligation under this subparagraph may be discharged by furnishing any equivalent combinations of fringe benefits or by making equivalent or differential payments in cash under rules and regulations established by the Secretary.

(3) A provision that no part of the services covered by this Act will be performed in buildings or surroundings or under working conditions, provided by or under the control or supervision of the contractor or any subcontractor, which are unsanitary or hazardous or dangerous to the health or safety of service employees engaged to furnish the services.

(4) A provision that on the date a service employee commences work on a contract to which this Act applies, the contractor or subcontractor will deliver to the employee a notice of the compensation required under paragraphs (1) and (2) of this subsection, on a form prepared by the Federal agency,

or will post a notice of the required compensation in a prominent place at the worksite.

(5) A statement of the rate that would be paid be the Fedral agency to the various classes of service employees if section 5341 or section 5332 of title 5, United States Code, were applicable to them. The Secretary shall give due consideration to such rates in making the wage and fringe benefit determinations specified in this section.

(b) (1) No contractor who enters into any contract with the’ Federal Government the principal purpose of which is to furnish services through the use of service employees and no subcontractor thereunder shall pay any of his employees engaged in performing work on such contracts less than the minimum wage specified under section 6(a) (1) of the Fair Labor Standards Act of 1938, as amended (52 Stat. 1060; 29 U.S.C. 201, et seq.).

(2) The provisions of sections 3, 4, and 5 of this Act shall be applicable to violations of this subsection.

SEC.3. (a) Any violation of any of the contract stipulations required by section 2(a) (1) or (2) or of section 2(b) of this Act shall render the party responsible therefor liable for a sum equal to the amount of any deductions, rebates, refunds, or underpayment of compensation due to any employee engaged in the performance of such contract. So much of the accrued payment due on the contract or any other contract between the same contractor and the Federal Government may be withheld as is necessary to pay such employees. Such withheld sums shall be held in a deposit fund. On order of the Secretary, any compensation which the head of the Federal agency or the Secretary has found to be due pursuant to this Act shall be paid directly to the underpaid employees from any accrued payments withheld under this Act.

(b) In accordance with regulations prescribed pursuant to section 4 of this Act, the Federal agency head or the Secretary is hereby authorized to carry out the provisions of this section.

subject upon written notice to cancellation by the contracting agency. Whereupon, the United States may enter into other contracts or arrangement for the completion of the original contract, charging any additional cost to the original contractor.

SEC. 4. (a) Sections 4 and 5 of the Act of June 30, 1936 (49 Stat. 2036), as amended, shall govern the Secretary’s authority to enforce this Act, make rules, regulations, issue orders, hold hearings, and make decisions based upon findings of fact, and take other appropriate action hereunder.

(b) The Secretary may provide such reasonable limitations and may make such rules and regulations allowing reasonable variations, tolerances, and exemptions to and from any or all provisions of this Act (other than section 10), but only in special circumstance where he determines that such limitation, variation, tolerance, or exemption is necessary and proper in the public interest or to avoid the serious impairment of government business, and is in accord with the remedial purpose of this Act to protect prevailing labor standards.

(c) No contractor or subcontractor under a contract, which succeeds a contract subject to this Act and under 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 in accordance with regulations adopted by the Secretary that such wages and fringe benefits are substantially at variance with those which prevail for services of a character similar in the locality.

(d) Subject to limitations in annual appropriation Acts but notwithstanding any other provision of law, contracts to which this Act applies may, if authorized by the Secretary,

be for any term of years not exceeding five, if each such contract provides for the periodic adjustment of wages and fringe benefits pursuant to future determination issued in the manner prescribed in section 2 of this Act no less often than once every two years during the term of the contract, covering the various classes of service employees.

SEC. 5. (a) The Comptroller General is directed to distribute a list to all agencies of the Government giving the names of persons or firms that the Federal agencies or the Secretary have found to have violated this Act. Unless the Secretary otherwise recommends because of unusual circumstances, no contract of the United States shall be awarded to the persons or firms appearing on this list or to any firm, corporation, partnership, or association in which such persons or firms have a substantial interest until three years have elapsed from the date of publication of the list containing the name of such persons or firms. Where the Secretary does not otherwise recommend because of unusual circumstances, he shall not later than ninety days after a hearing exam iner has made a finding of a violation of this Act, forward to the Comptroller General the name of the individual or firm found to have violated the provisions of this Act.

(b) If the accrued payments withheld under the terms of the contract are insufficient to reimburse all service employees with respect to whom there has been a failure to pay the compensation required pursuant to this Act, the United States may bring action against the contractor, subcontractor, or any sureties in any court of competent jurisdiction to recover the remaining amount of underpayments. Any sums thus recovered by the United States shall be held in the deposit fund and shall be paid, on order of the Secretary, directly to the underpaid employee or employees. Any sum not paid to an employee because of inability to do so within three years shall be covered into the Treasury of the United States as miscellaneous receipts.

SEC. 6. In determining any overtime pay to which such service employees are entitled under any Federal law, the regular or basic hourly rate of pay of such an employee shall

not include any fringe benefit payments computed hereunder which are excluded from the regular rate under the Fair Labor Standards Act by provisions of section 7(d) thereof.

SEC. 7. This Act shall not apply to-

(1) any contract of the United States or District of Columbia for construction, alteration and /or repair, including painting and decorating of public buildings or public works;

(2) any work required to be done in accordance with the provisions of the Walsh-Healey Public Contracts Act (49 Stat. 2036) ;

(3) any contract for the carriage of freight or personnel by vessel, airplane, bus, truck, express, railway line or oil or gas pipeline where published tariff rates are in effect;

(4) any contract for the furnishing of services by radio, telephone, telegraph, or cable companies, subject to the Communications Act of 1934;

(5) any contract for public utility services, including electric light and power, water, steam, and gas;

(6) any employment contract providing for direct services to a Federal agency by an individual or individuals; and

(7) any contract with the Post Office Department, the principal purpose of which is the operation of postal contract stations.

SEC. 8. For the purposes of this Act—

(a) “Secretary” means Secretary of Labor.

(b) The term “service employee” means any person engaged in the performance of a contract entered into by the United States and not exempted under section 7, whether negotiated or advertised, the principal purpose of which is to furnish services in the United States (other than any person employed in a bona fide executive administrative, or professional capacity, as those terms are defined in part 541 of title 29, Code of Federal Regulations, as of July 30, 1976, and any subsequent revision of those regulations ); and shall include all such persons

regardless of any contractual relationship that may be alleged to exist between a contractor or subcontractor and such persons.

(d) The term “United States” when used in a geographical sense shall include any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf lands as defined in the Outer Continental Shelf Lands Act, American Samoa, Guam, Wake Island, Eniwetok Atoll, Kwajalein Atoll, Johnston Island, and Canton Island,’ but shall not include any other territory under the jurisdiction of the United States or any United States base or possession within a foreign country.

SEC. 9. This Act shall apply to all contracts entered into pursuant to negotiations concluded or invitations for bids issued on or after ninety days from the date of enactment of this Act.

Sec. 10. It is the intent of the Congress that determinations of minimum monetary wages and fringe benefits for the various classes of service employees under the provisions of paragraphs (I) and (2) of section 2 should be made with respect to all contracts subject to this Act, as soon as it is administratively feasible to do so. In any event, the Secretary shall make such

Service Contract Act

determinations with respect to at least the following contracts subject to this Act which are entered into during the applicable fiscal year:

(1) For the fiscal year ending June $0,1973, all contracts under which more than twentyfive service employees are to be employed.

(2) For the fiscal year ending June 30, 1974, all contracts, under which more than twenty service employees are to be employed.

(3) For the fiscal year ending June 30, 1975, all contracts under which more than fifteen service employees are to be employed.

(4) For the fiscal year ending June 30, 1976, all contracts under which more than ten service employees are to be employed.

(5) For the fiscal year ending June 30, 1977, and for each fiscal year thereafter, all contracts under which more than five service employees are to be employed,

Approved October 89-286)

Approved October Public Law 92-473).

Approved October Public Law 94-489). 22, 1965 (Public Law 9, 1972 (Amendments, 13, 1976 (Amendments,

Legislative History (Public Law 89-286) :

House Report No. 948 (Comm. on Education& Labor).

Senate Report No. 798 (Comm. on Labor & Public Welfare).

Congressional Record, Vol. 111 (1965) : Sept. 20, Considered and passed House.

Oct. 1, Considered and passed Senate, amended. Oct. 6, House concurred in Senate amendment.

Legislative History (Public Law 92-473) :

House Report No. 92-1251 (Comm. on Education and Labor).

Senate Report No. 92-1131 (Comm. on Labor and Public Welfare).

Congressional Record, Vol. 118 (1972) : Aug. 7, considered and passed House.

Sept. 19, considered and passed Senate, amended. Sept. 27, House concurred in Senate amendments.

Legislative History (Public Law 94-489) : House Report No. 94-1571 (Comm. on Education and Labor).

Congressional Record, Vol. 122 (1976) : Sept. 21, considered and passed House. Sept. 30, considered and passed Senate.

Statutory and Regulatory References

Federal Labor Statutes

Contract Work Hours and Safety Standards Act (CWHSSA) of 1962 (40 USC § 327 et seq) – Overtime compensation and safety standards applicable to laborers and mechanics on federal contracts.

Copeland Anti-Kickback Act of 1934 (40 USC § 3145) – Requires construction contractors to submit certified weekly reports of wages paid to workers, and provides criminal penalties for failure to comply, falsified records, and employee kickbacks.

Davis-Bacon Act (DBA) of 1931 (40 USC §§ 3141-3144 and 3146-3148) – Prevailing minimum wages and fringe benefits applicable to construction, reconstruction, alteration and repair of public buildings and public works. Davis-Bacon & Related Acts (DBRA) are statutes that specifically apply the provisions of DBA to certain construction projects.

Equal Pay Act (EPA) of 1963 (29 USC § 206(d)) – Requires equal pay to men and women performing work requiring equal skill, effort, and responsibility when performed under similar working conditions.

Fair Labor Standards Act of 1938 (29 USC § 201 et seq) – Establishes the basic minimum wage, overtime compensation, restrictions on employment of child labor, and recordkeeping requirements for employers.

Family and Medical Leave Act (FMLA) of 1993 (29 U.S.C. § 2601 et seq) – Provides unpaid leave for covered workers under certain conditions involving family and medical obligations.

McNamara-O’Hara Service Contract Act of 1965 (41 USC § 351 et seq) – Prevailing minimum wages and fringe benefits applicable to federal service contracts.

Miller Act of 1935 (40 USC §3131 et seq – Requires performance and payment bonds on contracts exceeding $100,000 for the construction, alteration, or repair of public buildings or public works in the US.

Portal-to-Portal Act of 1947 (29 USC 251 et seq) – Defines preliminary and postliminary duties as hours worked under FLSA.

Railway Labor Act (RLA) of 1926 (45 USC § 151 et seq) – Regulates labor-management relations in the railway industry; regulations governing the airline industry were added by amendment in 1936.

Taft-Hartley Act of 1947 (Labor-Management Relations Act (LMRA)) 29 USC §§ 141197) – Amended the National Labor Relations Act and added a list of prohibited labor union practices.

Walsh-Healey Public Contracts Act (WHPCA) of 1936 (41 USC §§ 35-45) – Prevailing minimum wages, overtime compensation, and safety standards applicable to federal contracts for the manufacturing and furnishing of materials, supplies, articles, and equipment.

Federal Labor Regulations

Title 29, Code of Federal Regulations (CFR)

[Listing below is paraphrased from the actual regulatory title]

Part 1 – Procedures for predetermination of wage rates under the Davis-Bacon Act

Part 3 – Payment and reporting of wages on federal construction contracts

Part 4 – Labor standards for federal service contracts

Part 5 – Labor standards provisions applicable to federal construction contracts and Contract Work Hours and Safety Standards Act

Part 6 – Rules of practice for administrative proceedings enforcing federal government Contract labor standards

Parts 7 & 8 – Rules for DBA/SCA appeals before the Administrative Review Board

Part 525 – Employment of workers with disabilities under special certificates

Part 531 – Defines wage payments (including tips, meals and lodging, etc.)

Part 541 – Defines the exemption for salaried employees (executive, administrative, professional, outside sales, teachers, and computer systems workers)

Part 778 – Rules requiring payment of overtime compensation

Part 785 – Rules defining hours worked

• Presentation by Department of Defense and NASA Agency Labor Advisors

HOLD FORPresentation by Department of Defense and NASA Agency Labor Advisors

SCA Workshops

• 1-A

• 1-B

• Answer Key

SCA WORKSHOPS

Service Contract Act Training for Contractors

Coverage and Contract Exemptions

1. You are a facilities maintenance services contractor maintaining government facilities in Dade County (Miami), Florida. Your contract contains both SCA and DBA clauses and wage determinations. The Government has sent a crew to Guantanamo Bay, Cuba, to establish an office complex. Through a bilateral agreement, the Government modified your existing contract to require you to maintain and repair the facilities at Guantanamo. Similar to your Miami tasks, you will set up and maintain electronic communication systems; set up and maintain a security system; and upgrade and maintain the HVAC, water, power, and sewage disposal systems. You elect to subcontract this work to a company that is familiar with the requirements and the locality.

Question: What contract labor standards would you flow down to your subcontractor?

2. You are head of the contracting department at Apple, Inc. Under a long-term supply contract with a major federal agency in Washington DC, you have provided boat-loads of computers, laptops, smartphones, tablets, and related merchandise. The federal agency now issues a solicitation for regular maintenance services, calibration, and repair of this same equipment. It is clearly a stand-alone services contract, and the agency has incorporated the SCA clause and SCA wage determinations in the solicitation. Competition for this contract is very keen. Numerous digital companies are competing for award – including Dell, District Digital Dudes, Two Guys & a Truck, Apple, and others.

Question: What unique contract labor issue should you be aware of as you prepare your proposal?

3. You are a contracts expert with DoItAllServices, Inc., performing a management and operations contract with a federal procurement agency in Washington DC. This Government agency has been extraordinarily efficient, cost-conscious, and effective in its mission during this last year. As the new Administration takes office in January 2017, it has decided to recognize such great Government agencies for their efforts. The White House schedules a parade down Pennsylvania Avenue to congratulate the agency. You are tasked with making all of the arrangements. Since it will be a long parade, there will be a need for porta-potties to be strategically placed along the parade route. (continued on next page)

SCA WORKSHOPS

Service Contract Act Training for Contractors

Page Two

Question #3, continued:

You call the local porta-potty business, Honey’s Buckets, and ask them to provide a proposal for these items, placed about every 50 feet and kept in proper working condition throughout the day.

Question: What contract labor standards would apply to your contract with Honey’s Buckets?

Individual Employee Exemptions

4. The Office of Management and Budget wants to purchase training programs to instruct Government personnel how to use new and innovative ways to monitor federal agency spending. The awarded contractor will write the course materials and conduct the training courses at various federal facilities throughout the US. OMB has incorporated SCA clauses and wage determinations in the solicitation. You are the contracting officer for the San Diego Community College, tasked with preparing a proposal for this contract. Your major competitors for this solicitation are Big & Good Training, Inc., The Hobbit School for Little Learners, Inc., and Truman Financial Management Services.

Question: What unique contract labor issue should you be aware of as you prepare your proposal?

5. The National Security Administration has just awarded a contract to Ghost Busters, Inc., for information technology services. You are Ghost Busters’ HR Director. The contract requires tracking and reporting on numerous types of data delivered by Government field offices to the Government’s headquarters in Alexandria VA. The contract work requires skilled computer programmers and computer systems analysts. Ghost Busters will receive specific data from NSA field personnel, and enter the data into NSA’s existing database. The contractor will then produce analyses and reports that are designed and requested by the contractor’s management team, its program managers, and NSA personnel. The labor market for these workers is tight and will require a contractor to pay over $30/hour. (continued on next page)

SCA WORKSHOPS

Service Contract Act Training for Contractors

Page Three

Question #5, continued:

a. Question: Will the vast majority of these contract workers be exempt from FLSA and SCA? Explain why or why not.

b. Question: What labor standards should NSA incorporate into Ghost Busters contract?

6. Where does an offeror, or an awarded contractor, obtain the proper SCA wage determinations applicable to their contract?

7. If a predecessor contractor had a collective bargaining agreement with a union covering his own contract workers, will the successor have to sign that same agreement if it is awarded the follow-on contract?

SCA WORKSHOPS

Service Contract Act Training for Contractors

Contract Price Adjustments

1. [Remember the NSA contract awarded to Ghost Busters . . . . .? #5, on the Workshop #1A]

The National Security Administration has just awarded a contract to Ghost Busters, Inc., for information technology services. You are Ghost Busters’ HR Director. The contract requires tracking and reporting on numerous types of data delivered by Government field offices to the Government’s headquarters in Alexandria VA. The contract work requires skilled computer programmers and computer systems analysts. Ghost Busters will receive specific data from NSA field personnel, and enter the data into NSA’s existing database. The contractor will then produce analyses and reports that are designed and requested by the contractor’s management team, its program managers, and NSA personnel. The labor market for these workers is tight and will require the contractor to pay well over $30/hour.

New Question: If a new SCA wage determination is incorporated at the exercise of the first option, and it indicates an increase in the minimum wage rates for these classifications, will Ghost Busters be eligible for a contract price increase?

2. You are the HR Director for Gotcha-Covered Guard Services, Inc. Your co-worker, Moni Baggs, is the head of the company’s finance and contracts department. The contract you perform has just been modified to exercise the First Option and add a new SCA wage determination for the next period. Now it is time for you both to work up your computation for a SCA price adjustment applicable to the new contract year. [continued on next page]

SCA WORKSHOPS

Service Contract Act Training for Contractors

Gotcha-Covered Guard Services, Inc.,

Question #2 - Price Adjustment Computation (continued)

Payroll sends you this information on the wage and H&W changes:

CLIN Classification Old WD New WD Wage Increase1

#1 Guard I Guard II

Lieutenant (not listed on WD)

Captain (not listed on WD)

Chief of Security (not listed on WD)

Clerk 1

Clerk II

#3 Administrative Assistant (Actually paid $15.00/hr)

1 The percentage increase in wage rates on the WD are as follows: for Guards I +5%; for Guards II +6%; for Security Clerk I +3%; for Security Clerk II +5%; and for Admin Assistant +5%. Lieutenants (not on WD) were increased +10%

The average wage increase for our workforce is +6%.

2 Captain salaries average $34.00 per hour, and that rate was increased by the average increase of 6%, or $2.04 per hour.)

3 Chief-Security salary averages $40.00 per hour, and that rate was increased by the average increase of 6%, or $2.40 per hour.)

Gotcha-Covered Guard Services, Inc.,

Question #2 - Price Adjustment Computation (continued)

The finance office has computed the burdens to be added to the above SCA increases as follows:

Question: What are the factors that would be considered in determining the amounts that will be allowable for a contract price adjustment under FAR 52.222-43?

SCA 2024 Training Program

SERVICE CONTRACT ACT

2024 TRAINING PROGRAM

Table of Contents

THE MCNAMARA-O’HARA SERVICE CONTRACT ACT

An Introduction to the Statute and Contractor Responsibilities

WhatContractorsShouldKnow

WhatContractorsShouldKnow

SCAIntroduction

ServiceContractLaborStandards (41U.S.C.chapter67)

WhatDoestheSCARequire?

MixedContractRequirements

ContractsNOTCoveredbySCA

SCAStatutoryExemptions

OtherSCAExemptions

OtherSCAExemptions(cont’d)

OtherSCAExemptions(cont’d)

WhatAre“ServiceEmployees”?

IndividualEmployeeExemptions

IndividualEmployeeExemptions

IndividualEmployeeExemptions

IndividualEmployeeExemptions

IndividualEmployeeExemptions

Reg541–SalaryTest&PrimaryDuty

Reg541–SalaryTest&PrimaryDuty

ExemptEmployees?OrNot??

WhatDoesSCARequire?

WhatDoesSCARequire?

SCARequirements(cont’d)

AReviewofSCAWage Requirements

TypesofSCAWDs

TypesofSCAWDs(cont’d)

WhereDoYouGetSCAWDs?

AReviewofDeterminingSCA ClassificationsandMapping

DOL’sSCADirectoryofOccupations

Classifications&Mapping

Classifications&Mapping

Classifications&Mapping

SCAConformances

SCAConformances

SCAConformances

SCAMappingDecisions

SCAWages

WhatAre“HoursWorked”

OvertimeCompensation

OvertimeCompensation

OvertimeCompensation

AReviewofSCAFringeBenefits

SCAFringeBenefits

SCAFringeBenefits

SCAFringeBenefits

SCAFringeBenefits

SCAH&WBenefits

SCAH&WBenefits

SCAH&WBenefits

SCAH&WBenefits

SCAH&WBenefits

SCAH&WBenefits

SCAH&WBenefitsandACA

SCAH&WBenefits

SCAVacationBenefits

SCAVacationBenefits

SCAVacationBenefits

SCAHolidayBenefits

SCABenefitsDuePart-TimeWorkers

SCABenefitsDuePart-TimeWorkers

SCABenefitsDuePart-TimeWorkers

AReviewofSCANotification Requirements

SCANotificationRequirements

SCANotificationRequirements

SCASection4(c)

SCASection4(c)

SCASection4(c)

SCASection4(c)

TimelinessforCBAs

TimelinessforCBAs(cont’d)

SubstantialVariance

Arm’sLengthNegotiations

AReviewofSCAContract PriceAdjustments

SCAContractPriceAdjustments