Wage and Hour Division (WHD)
Section 64b03: McNamara-O'Hara Service Contract Act (SCA) Coverage
- An employer with a contract entered into by the United States, or the District of Columbia, the principle purpose of which is to furnish services through the use of service employees, is covered under the SCA. This includes employers who operate work centers. All contracts in excess of $2,500, or for an indefinite dollar amount, require a wage determination specifying the prevailing wage and fringe benefits for different classifications of work. If the award amount on a contract is less than $2,500.00, the FLSA minimum wage is the applicable SCA prevailing wage rate (see Regulations 29 CFR Parts 4.5 and 4.6.
- The SCA, like the FLSA, allows an employer to pay service employees who have disabilities for the work to be performed a SMW less than the prevailing wage required by the wage determination. Regulations, 29 CFR Part 4.6(o) instructs the contractor to follow the same "conditions and procedures" required for the employment of workers with disabilities under section 14(c) of the FLSA. However, this exception is from the prevailing wage only. Contractors are still required to pay the full fringe benefits, or the equivalent dollar cash payment in lieu of providing the benefits, to service employees who have disabilities for the work performed.
- The overtime requirements of CWHSSA apply to workers with disabilities performing the duties of laborer, mechanic, guard or watchman on SCA contracts valued in amounts that exceed $100,000 (see FOH 15a03).
- As mentioned in FOH 64b01(d) above, FLSA section 6(e) applies to employers with contracts to provide services under the SCA. It provides FLSA section 6(a)(1) minimum wage coverage even for those employees who do not work on the contract. Workers with disabilities who are subject to section 6(a) because their employers are SCA contractors, but do not themselves perform covered contract work, may still be paid SMWs under section 14(c) provided the employer has a valid certificate.
- As an enforcement policy, WH will apply the MW standard provided by section 6(e) only within an establishment in which work is performed on a government service contract (see FOH 30e01).
- The application of section 6(e) depends on the performance of contract services and not on the coverage or exemption status of the establishment under the FLSA. Thus, during any workweek in which the establishment is engaged in the performance of contract services, the wage rate provided in section 6(a) of the FLSA would be applicable to all employees of the establishment other than those specifically exempt under section 13(a)(1) of the FLSA or those subject to a higher wage rate pursuant to the SCA (see FOH 30e02).