The clauses set forth in the following paragraphs shall be included
in full by the contracting agency in every contract entered into by the
United States or the District of Columbia, in excess of $2,500, or in an
indefinite amount, the principal purpose of which is to furnish services
through the use of service employees:
(a) Service Contract Act of 1965, as amended: This contract is
subject to the Service Contract Act of 1965, as amended (41 U.S.C. 351
et seq.) and is
subject to the following provisions and to all other applicable
provisions of the Act and regulations of the Secretary of Labor issued
thereunder (29 CFR part 4).
(b)(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 there is such a wage determination attached to this
contract, the contracting officer shall require that 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), 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. 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 section.
(ii) Such conforming procedure shall be initiated by the contractor
prior to the performance of contract work by such unlisted class of
employee. A written report of the proposed conforming action, 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, shall be submitted
by the contractor to the contracting officer no later than 30 days after
such unlisted class of employees performs any contract work. The
contracting officer shall review the proposed action and promptly submit
a report of the action, together with the agency's recommendation and
all pertinent information including the position of the contractor and
the employees, to the Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor, for review. 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 this section, a new
conformed wage rate and fringe benefits may be assigned to such
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 paragraph
(b)(2)(ii) of this section 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 pursuant to
paragraphs (b)(2)(i) and (ii) of this section 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
such 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 Act and this contract.
(vi) Upon discovery of failure to comply with paragraphs (b)(2)(i)
through (v) of this section, 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 of
employees commenced contract work.
(3) If, as authorized pursuant to section 4(d) of the Service
Contract Act of 1965 as amended, 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 shall be subject to
adjustment after 1 year and not less often than once every 2 years,
pursuant to wage determinations to be issued by the Wage and Hour
Division, Employment Standards Administration of the Department of Labor
as provided in such Act.
(c) The contractor or subcontractor may discharge the obligation to
furnish fringe benefits specified in the attachment or determined
conformably thereto by furnishing any equivalent combinations of bona
fide fringe benefits, or by making equivalent or differential payments
in cash in accordance with the applicable rules set forth in subpart D
of 29 CFR part 4, and not otherwise.
(d)(1) 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 the contract
(regardless of whether they are service employees) less than the minimum
wage specified by section 6(a)(1) of the Fair Labor Standards Act of
1938. Nothing in this provision shall relieve the contractor or any
subcontractor of any other obligation under law or contract for the
payment of a higher wage to any employee.
(2) If this contract succeeds a contract, subject to the Service
Contract Act of 1965 as amended, 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 agreements, 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
Sec. 4.1b(b) of 29 CFR part 4 apply or unless the Secretary of Labor or
his authorized representative finds, after a hearing as provided in
Sec. 4.10 of 29 CFR part 4 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 Sec. 4.11 of 29 CFR part 4, 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
determnation 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.
(e) 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 section 2(a)(4) of the Act and of this contract.
(f) 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 or hazardous or dangerous to the health or safety of service
employees engaged to furnish these services, and the contractor or
subcontractor shall comply with the safety and health standards applied
under 29 CFR part 1925.
(g)(1) The contractor and each subcontractor performing work subject
to the Act shall make and maintain for 3 years from the completion of
the work records containing the information specified in paragraphs
(g)(1) (i) through (vi) of this section for each employee subject to the
Act and shall make them available for inspection and transcription by
authorized representatives of the Wage and Hour Division, Employment
Standards Administration of the U.S. Department of Labor:
(i) Name and address and social security number of each employee.
(ii) The correct work classification or classifications, rate or
rates of monetary wages paid and fringe benefits provided, rate or rates
of fringe benefit payments in lieu thereof, and total daily and weekly
compensation of each employee.
(iii) The number of daily and weekly hours so worked by each
employee.
(iv) Any deductions, rebates, or refunds from the total daily or
weekly compensation of each employee.
(v) A list of monetary wages and fringe benefits for those classes
of service employees not included in the wage determination attached to
this contract but for which such wage rates or fringe benefits have been
determined by the interested parties or by the Administrator or
authorized representative pursuant to the labor standards clause in
paragraph (b) of this section. A copy of the report required by the
clause in paragraph (b)(2)(ii) of this section shall be deemed to be
such a list.
(vi) Any list of the predecessor contractor's employees which had
been furnished to the contractor pursuant to Sec. 4.6(l)(2).
(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 such records
for inspection and transcription shall be a violation of the regulations
and this contract, and in the case of failure to produce such records,
the contracting officer, upon direction of the Department of Labor and
notification of the contractor, shall take action to cause suspension of
any further payment or advance of funds until such 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.
(h) The contractor shall unconditionally pay to each employee
subject to the Act 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. Such payments shall be made
no later than one pay period following the end of the regular pay period
in which such wages were earned or accrued. A pay period under this Act
may not be of any duration longer than semi-monthly.
(i) 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 Act all or part of the wages or fringe benefits
due under the Act, the agency 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 these clauses relating to the Service
Contract Act of 1965, 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.
(j) The contractor agrees to insert these clauses in this section
relating to the Service Contract Act of 1965 in all subcontracts subject
to the Act. The term contractor as used in these clauses in any
subcontract, shall be deemed to refer to the subcontractor, except in
the term Government prime contractor.
(k)(1) As used in these clauses, the term 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 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. The term service employee includes all such persons
regardless of any contractual relationship that may be alleged to exist
between a contractor or subcontractor and such persons.
(2) The following statement is included in contracts pursuant to
section 2(a)(5) of the Act and is for informational purposes only:
The following classes of service employees expected to be employed
under the contract with the Government would be subject, if employed by
the contracting agency, to the provisions of 5 U.S.C. 5341 or 5 U.S.C.
5332 and would, if so employed, be paid not less than the following
rates of wages and fringe benefits:
------------------------------------------------------------------------
Monetary
Employee class wage-fringe
benefits
------------------------------------------------------------------------
...........
...........
...........
------------------------------------------------------------------------
(l)(1) 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.
(2) 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
(Sec. 4.173 of Regulations, 29 CFR part 4), the incumbent prime
contractor shall furnish to 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.
(m) Rulings and interpretations of the Service Contract Act of 1965,
as amended, are contained in Regulations, 29 CFR part 4.
(n)(1) By entering into this contract, the contractor (and officials
thereof) certifies that neither it (nor he or she) 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 pursuant to section 5 of the Act.
(2) No part of this contract shall be subcontracted to any person or
firm ineligible for award of a Government contract pursuant to section 5
of the Act.
(3) The penalty for making false statements is prescribed in the
U.S. Criminal Code, 18 U.S.C. 1001.
(o) Notwithstanding any of the clauses in paragraphs (b) through (m)
of this section relating to the Service Contract Act of 1965, the
following employees may be employed in accordance with the following
variations, tolerances, and exemptions, which the Secretary of Labor,
pursuant to section 4(b) of the Act prior to its amendment by Public Law
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 section 2(a)(1) or 2(b)(1) of the Service Contract Act without
diminishing any fringe benefits or cash payments in lieu thereof
required under section 2(a)(2) of that Act, in accordance with the
conditions and procedures prescribed for the employment of apprentices,
student-learners, handicapped persons, and handicapped clients of
sheltered workshops 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 Service
Contract Act for the employment of apprentices, student-learners,
handicapped persons, or handicapped clients of sheltered workshops not
subject to the Fair Labor Standards Act of 1938, or subject to different
minimum rates of pay under the two acts, 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 parts 525 and 528 of
title 29 of the Code of Federal Regulations.
(p) 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 Bureau of
Apprenticeship and Training, Employment and Training Administration,
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.
(q) Where an employee engaged in an occupation in which he or she
customarily and regularly receives more than $30 a month in tips, the
amount of tips received by the employee may be credited by the employer
against the minimum wage required by Section 2(a)(1) or 2(b)(1) of the
Act to the extent permitted by section 3(m) of the Fair Labor Standards
Act and Regulations, 29 CFR Part 531. To utilize this proviso:
(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 Act minimum wage
through the combination of direct wages and tip credit;
(4) The use of such tip credit must have been permitted under any
predecessor collective bargaining agreement applicable by virtue of
section 4(c) of the Act.
(r) Disputes concerning labor standards. Disputes arising out of the
labor standards provisions of this contract shall not be subject to the
general disputes clause of this contract. Such disputes shall be
resolved in accordance with the procedures of the Department of Labor
set forth in 29 CFR parts 4, 6, and 8. 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.
(The information collection, recordkeeping, and reporting requirements
contained in this section have been approved by the Office of Management
and Budget under the following numbers:
------------------------------------------------------------------------
OMB control
Paragraph number
------------------------------------------------------------------------
(b)(2) (i)--(iv)........................................... 1215-0150
(e)........................................................ 1215-0150
(g)(1) (i)--(iv)........................................... 1215-0017
(g)(1) (v), (vi)........................................... 1215-0150
(l) (1), (2)............................................... 1215-0150
(q)(3)..................................................... 1215-0017
------------------------------------------------------------------------
[48 FR 49762, Oct. 27, 1983; 48 FR 50529, Nov. 2, 1983, as amended at 61
FR 68663, Dec. 30, 1996]
