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.

For contracts equal to or less than $2,500, contractors are required to pay the federal minimum wage as provided in Section 6(a)(1) of the Fair Labor Standards Act.

For prime contracts in excess of $100,000, contractors and subcontractors must also, under the provisions of the Contract Work Hours and Safety Standards Act, as amended, pay laborers and mechanics, including guards and watchmen, at least one and one-half times their regular rate of pay for all hours worked over 40 in a workweek. The overtime provisions of the Fair Labor Standards Act may also apply to SCA-covered contracts.

Key News

The Issuance of the 2013 Service Contract Act Health and Welfare rate update will occur in mid-June this year. Calculation of this rate is based upon the Bureau of Labor Statistics (BLS) Employment Cost Index (ECI). The Wage and Hour Division will use BLS’s quarterly data that is published in mid-June. The e98 webpage will be temporarily unavailable for a week during the update process. For information on policies, wage rates and/or benefits, please call 202-693-0073 or email WHD-WDS-PolicySupport@dol.gov. (June 3, 2013)

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