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SERVICE CONTRACT ACT WAGE DETERMINATIONS

DEPARTMENT OF LABORSCA RESOURCE BOOK 11/2002 SCA wage DETERMINATIONSSERVICE CONTRACT ACTWAGE DEPARTMENT OF LABORSCA RESOURCE BOOK 11/2002 SCA wage DETERMINATIONSSERVICE CONTRACT ACT, as amended (excerpt) SERVICE CONTRACT ACT wage DETERMINATIONSREQUESTING SCA wage DETERMINATIONSGUIDE TO COMPLETING AN INDIVIDUALSF-98 REQUESTSAMPLE CONSOLIDATED SCA WAGEDETERMINATIONSAMPLE SF-98 AND SF-98a REQUEST FOR AN SCAWAGE DEPARTMENT OF LABORSCA RESOURCE BOOK 11/2002 SCA wage DETERMINATIONS1 SERVICE CONTRACT ACT, as amended (excerpt) Sec. 2(a) Every CONTRACT (and any bid specification therefor) enteredinto by the United States or the District of Columbia in excess of $2,500,.. whether negotiated or advertised, the principal purpose of which is tofurnish services in the United States through the use of SERVICE employeesshall contain the following:(1) A provision specifying the minimum monetary wages to be paidthe various classes of services employees in the performance ofthe CONTRACT or any subcontract thereunder, as determined by theSecretary [of Labor], or her authorized representative, inaccordance with prevailing rates for such employees in thelocality or where a collective bargaining agreement covers a

u.s. department of labor sca resource book 11/2002 sca wage determinations service contract act, as amended (excerpt) service contract act wage determinations requesting sca wage determinations

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Transcription of SERVICE CONTRACT ACT WAGE DETERMINATIONS

1 DEPARTMENT OF LABORSCA RESOURCE BOOK 11/2002 SCA wage DETERMINATIONSSERVICE CONTRACT ACTWAGE DEPARTMENT OF LABORSCA RESOURCE BOOK 11/2002 SCA wage DETERMINATIONSSERVICE CONTRACT ACT, as amended (excerpt) SERVICE CONTRACT ACT wage DETERMINATIONSREQUESTING SCA wage DETERMINATIONSGUIDE TO COMPLETING AN INDIVIDUALSF-98 REQUESTSAMPLE CONSOLIDATED SCA WAGEDETERMINATIONSAMPLE SF-98 AND SF-98a REQUEST FOR AN SCAWAGE DEPARTMENT OF LABORSCA RESOURCE BOOK 11/2002 SCA wage DETERMINATIONS1 SERVICE CONTRACT ACT, as amended (excerpt) Sec. 2(a) Every CONTRACT (and any bid specification therefor) enteredinto by the United States or the District of Columbia in excess of $2,500,.. whether negotiated or advertised, the principal purpose of which is tofurnish services in the United States through the use of SERVICE employeesshall contain the following:(1) A provision specifying the minimum monetary wages to be paidthe various classes of services employees in the performance ofthe CONTRACT or any subcontract thereunder, as determined by theSecretary [of Labor], or her authorized representative, inaccordance with prevailing rates for such employees in thelocality or where a collective bargaining agreement covers anysuch SERVICE employees, in accordance with the rates for suchemployees provided for in such agreement, including prospectivewage increases provided for in such agreement as a result ofarm's-length negotiations.

2 (2) A provision specifying the fringe benefits to be furnished thevarious classes of SERVICE Sec. 4 .. (c) No contractor or subcontractor under a CONTRACT , whichsucceeds a CONTRACT subject to this Act under and which substantially thesame services are furnished, shall pay any SERVICE employee under suchcontract less than the wages and fringe benefits, including accrued wagesand fringe benefits, and any prospective increases in wages and fringebenefits provided for in a collective-bargaining agreement as a result ofarm's-length negotiations, to which such SERVICE employees would havebeen entitled if they were employed under the predecessor CONTRACT :Provided, that in any of the foregoing circumstances such obligationsshall not apply if the Secretary finds after a hearing .. that such wagesand fringe benefits are substantially at variance with those which prevailfor services of a character similar in the locality.

3 (Emphases added.) DEPARTMENT OF LABORSCA RESOURCE BOOK 11/2002 SCA wage DETERMINATIONS2 SERVICE CONTRACT ACT wage DETERMINATIONSA. SCA wage determination requirements The SCA wage determination (WD) sets the minimum wages and fringe benefitsthat contractors and their subcontractors must pay SERVICE employees working oncovered contracts. Wages are defined as monetary compensation provided to employees. Theyare usually listed in the wage determination as hourly wage rates. Fringe benefits are defined in section 2(a)(2) of the Act as follows: Such fringe benefits shall include medical or hospital care, pensions onretirement or death, compensation for injuries or illness resulting fromoccupational 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 orother similar programs and other bona fide fringe benefits not otherwiserequired by federal, state, or local law to be provided by the contractor orsubcontractor.

4 The various fringe benefits listed in the Act are illustrative of those whichmay be included in the WD. Which fringe benefits are included in the WDdepends upon the type of WD to be issued and the evaluation of source dataused to develop the WD. Fringe benefits may be provided as monetarycompensation (cash payments) in lieu of providing the listed benefits,provided certain records are kept. Most WD's are revised periodically, as new health and welfare benefits orwage survey data become available. However, if a WD is properly includedin the CONTRACT at the time of award, the CONTRACT does not need to be modifiedto include subsequent revisions to the WD prior to completion of the firstyear of the CONTRACT . Section 10 of the Act requires the Department of Labor to issue a WD for everyservice CONTRACT employing more than five SERVICE employees.

5 If the CONTRACT requires five or fewer SERVICE employees, the contractingagency must still request a WD, and if one is issued, include the applicableWD in the CONTRACT . There is a common misconception among contractingofficers that they need not submit a request if there will be five or fewerservice employees performing on the CONTRACT . This has never been thecase. The contracting agency must request a WD even if only one serviceemployee will be employed on the CONTRACT , but the wage and DEPARTMENT OF LABORSCA RESOURCE BOOK 11/2002 SCA wage DETERMINATIONS3 Division (WH) has the option of not issuing a WD for contracts with fiveor fewer SERVICE employees. If no WD has been issued for a SERVICE CONTRACT involving five or fewerservice employees, the contractor can pay no less than the minimum wagerequired by section 6(a)(1) of Fair Labor Standards Act.

6 If the contractinvolves more than five SERVICE employees, the CONTRACT must contain a , we have over 204 wage DETERMINATIONS with each containing over300 classifications. It would be a rare occurrence if the Department of Laborhad not issued a wage determination for a geographic SCA wage DETERMINATIONS format In 1994, WH began to issue SCA wage DETERMINATIONS in a revised format thatincludes nearly all standard occupations on a single wage determination . In thepast, wage DETERMINATIONS were issued that only covered classes in broadoccupational groupings. This format, generally referred to as the consolidatedwage determination , reduces the need for SERVICE CONTRACT Act (SCA)conformance actions, and improves SERVICE to SCA wage determinationscustomers. Currently there are 204 areas for which consolidated wage DETERMINATIONS arebeing Two bases on which SCA WD's are issued:1.

7 Prevailing in the locality. DETERMINATIONS that set forth minimum monetary wageand fringe benefits determined to be prevailing for various classes of serviceemployees in the locality after giving due consideration to the rates applicableto such SERVICE employees if directly hired by the Federal Government. (Sections2(a)(1), 2(a)(2), and 2(a)(5) of the Act); and wage rates and fringe benefits prevailing in the locality (29 CFR ): Rates based on surveys and rates based on union dominance. Thesedeterminations are usually based on data collected by the Bureau of LaborStatistics (BLS) under the National Compensation and OccupationalEmployment Statistics Surveys. Union Dominance. The SCA regulations provide that where a single rate ispaid to a majority (50 percent or more) of the workers in a class of serviceemployees engaged in similar work in a particular locality, that rate isdetermined to prevail.

8 29 CFR (b). These majority rate prevailingwage DETERMINATIONS are typically called union dominance DEPARTMENT OF LABORSCA RESOURCE BOOK 11/2002 SCA wage DETERMINATIONS42. Collective Bargaining Agreement (Successorship). DETERMINATIONS that set forththe wage rates and fringe benefits, including accrued and prospectiveincreases, contained in a collective bargaining agreement applicable to theservice employees who performed on a predecessor CONTRACT in the samelocality. (Sections 4(c) and 2(a)(1) and (2) of the Act). wage rates and fringe benefits based on the predecessor contractor's collectivebargaining agreement (CBA) See 29 CFR 4(c): For section 4(c) to be applicable, the predecessor CONTRACT must involvesubstantially the same services being provided in the same of 4(c): The successor contractor is obligated to pay its employees the wages andfringes in the predecessor's CBA that they would have been entitled to ifthey were employed by the predecessor.

9 This obligation exists whether or not the employees of the predecessorcontractor are hired by the successor contractor. This obligation willcontinue to exist even if the successor contractor is signatory to its ownCBA or chooses to sign or not sign the same CBA as entered into by thepredecessor contractor. Since the obligations of section 4(c) are statutory, self-executing, they arenot dependent upon the inclusion of the CBA rates in the WD. Forexample, if the Department of Labor issues a WD for a particularcontract based upon prevailing rates rather than the CBA because theagency failed to advise WH of the existence of the CBA or the WD doesnot reflect accurately all the economic terms of the CBA, the successorcontractor is still obligated to pay the CBA rates, unless the limitation insection (b) applies, or if there is a hearing and a finding of substantial variance, as discussed below.

10 The limitations to Section 4(c) can be found in 29 CFR (b).Specifically, the limitations in (1) and (2) only apply if thecontracting agency gives written notification to both the incumbentcontractor and the union at least 30 day in advance of all applicableestimated procurement dates. If such notification is given, the CBA mustbe provided to the contracting officer (Not DOL) within the timeframesspecified in Section (b). If the CBA is not provided to the contractingofficer within these timeframes then the CBA does not apply pursuant toSection 4(c) of DEPARTMENT OF LABORSCA RESOURCE BOOK 11/2002 SCA wage DETERMINATIONS5 REQUESTING SCA wage DETERMINATIONSA. Responsibility of contracting agency to request SCA wage determinationsContracting agencies request a wage determination (WD) from the Department ofLabor's Division of wage DETERMINATIONS , Branch of SCA wage DETERMINATIONS ,using Standard Forms 98 (SF-98) and 98a, Notice of Intention to Make a ServiceContract and Response to Notice.


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