THE LAW PERTAINING TO CONTRACT WORKERS
Wage and Hour Division (WHD)
McNamara-O’Hara Service Contract Act (SCA)
Overview (Comments are below)
The McNamara-O’Hara Service Contract Act requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor’s collective bargaining agreement. The Department of Labor issues wage determinations on a contract-by-contract basis in response to specific requests from contracting agencies. These determinations are incorporated into the contract.
Key News
- The Wage and Hour Division issued All Agency Memorandum 227, which sets the Service Contract Act Health and Welfare Fringe Benefit rate at $4.48 per hour effective July 11, 2018. The AAM also sets an SCA Health and Welfare Fringe Benefit rate of $4.18 per hour for work to which EO 13706, Establishing Paid Sick Leave for Federal Contractors, applies.
Website for the above information and more details: https://www.dol.gov/whd/govcontracts/sca.htm
The Service Contract Act can be found at: https://www.dol.gov/whd/regs/statutes/serv01.pdf
Comments:
- If you work under the Service Contract Act, you have a big choice to make. Do you want to be paid:
- Minimum Wage: if you are NOT covered by an IAM Collective Bargaining Agreement, you are paid under the Area Wage Determination (AWD). Since the Contractor is only reimbursed the minimum amount shown in the AWD, you are paid the minimum wage.
- A negotiated higher rate under an IAM CBA: the biggest advantage of being in an IAM represented unit is the ability to bargain wages, benefits and working conditions. You can negotiate a fair wage for the work you perform.
- Reimbursement: were you aware that the Contractors are reimbursed all of the cost of increased wages and benefits that you receive in the CBA. Contractors will not willingly give you massive raise because their primary concern is winning the re-compete so they want to keep raises reasonable so that they appear to be good Stewards of the governments money.
