EMPLOYEES COVERED BY THE ACT

4.150 Employee coverage, generally. 4.151 Employees covered by provisions of section 2(a).

4.152 Employees subject to prevailing compensation provisions of sections 2(a) (1) and (2) and 4(c).

4.153 Inapplicability of prevailing compensation provisions to some employees. 4.154 Employees covered by sections 2(a) (3) and (4).

4.155 Employee coverage does not depend on form of employment contract. 4.156 Employees in bona fide executive, administrative, or professional capacity. 4.157-4.158 [Reserved]

4.169 Wage payments-work subject to dif ferent rates.

4.170 Furnishing fringe benefits or equiva lents.

4.171 "Bona fide" fringe benefits. 4.172 Meeting requirements for particular fringe benefits-in general.

4.173 Meeting requirements for vacation fringe benefits.

4.174 Meeting requirements for holiday fringe benefits.

4.175 Meeting requirements for health welfare, and/or pension benefits. 4.176 Payment of fringe benefits to tempo rary and part-time employees. 4.177 Discharging fringe benefit obliga tions by equivalent means.

4.178 Computation of hours worked. 4.179 Identification of contract work.

OVERTIME PAY OF COVERED EMPLOYEES 4.180 Overtime pay-in general.

4.181 Overtime pay provisions of other Acts.

4.182 Overtime pay of service employees entitled to fringe benefits.

NOTICE TO EMPLOYEES

4.183 Employees must be notified of com pensation required.

4.184 Posting of notice.

RECORDS

4.185 Recordkeeping requirements. 4.186 [Reserved]

Subpart E-Enforcement

4.187 Recovery of underpayments. 4.188 Ineligibility for further contracts when violations occur.

4.189 Administrative proceedings relating to enforcement of labor standards. 4.190 Contract cancellation. 4.191 Complaints and compliance assist

ance.

AUTHORITY: 41 U.S.C. 351, et seq., 79 Stat. 1034, as amended in 86 Stat. 789, 90 Stat. 2358; 41 U.S.C. 38 and 39; and 5 U.S.C. 301.

SOURCE: 48 FR 49762, Oct. 27, 1983, unless otherwise noted.

§ 4.1a Definitions and use of terms.

As used in this part, unless otherwise indicated by the context

(a) Act, Service Contract Act, McNamara-O'Hara Act, or Service Contract Act of 1965 shall mean the Service Contract Act of 1965 as amended by Public Law 92-473, 86 Stat. 789, effective October 9, 1972, Public Law 93-57, 87 Stat. 140, effective July 6, 1973, and Public Law 94-489, 90 Stat. 2358, effective October 13, 1976 and any subsequent amendments thereto.

(b) Secretary includes the Secretary of of Labor, the Deputy Under Secretary for Employment Standards, and their authorized representatives.

(c) Wage and Hour Division means the organizational unit in the Employment Standards Administration of the Department of Labor to which is assigned the performance of functions of the Secretary under the Service Contract Act of 1965, as amended.

(d) Administrator means the Adminnistrator of the Wage and Hour Division, or authorized representative.

(e) Contract includes any contract subject wholly or in part to the provisions of the Service Contract Act of 1965 as amended, and any subcontract of any tier thereunder. (See §§ 4.1098 4.134.)

contractors, subcontractors, employers or joint employers for purposes of compliance with the provisions of the Act.

(g) Affiliate or affiliated person includes a spouse, child, parent, or other close relative of the contractor or subcontractor; a partner or officer of the contractor or subcontractor; a corporation closely connected with a contractor or subcontractor as a parent, subsidiary, or otherwise; and an officer or agent of such corporation. An affiliation is also deemed to exist where, directly or indirectly, one business concern or individual controls or has the power to control the other or where a third party controls or has the power to control both.

(h) Wage determination includes any determination of minimum wage rates or fringe benefits made pursuant to the provisions of sections 2(a) and/ or 4(c) of the Act for application to the employment in a locality of any class or classes of service employees in the performance of any contract in excess of $2,500 which is subject to the provisions of the Service Contract Act of 1965.

§ 4.1b Payment of minimum compensation based on collectively bargained wage rates and fringe benefits applicable to employment under predecessor contract.

(a) Section 4(c) of the Service Contract Act of 1965 as amended provides special minimum wage and fringe benefit requirements applicable to every contractor and subcontractor under a contract which succeeds a contract subject to the Act and under which substantially the same services as under the predecessor contract are furnished in the same locality. Section 4(c) provides that no such contractor or subcontractor shall pay any service employee employed on the contract work less than the wages and fringe benefits provided for in a collective bargaining agreement as a result of arms-length negotiations, to which such service employees would have been entitled if they were employed under the predecessor contract, including accrued wages and fringe benefits and any prospective increases in

wages and fringe benefits provided for in such collective bargaining agreement. If, however, the Secretary finds after a hearing in accordance with the regulations set forth in § 4.10 of this subpart and parts 6 and 8 of this title that in any of the foregoing circumstances such wages and fringe benefits are substantially at variance with those which prevail for service of a character similar in the locality, those wages and/or fringe benefits in such collective bargaining agreement which are found to be substantially at variance shall not apply, and a new wage determination shall be issued. If the contract has been awarded and work begun prior to a finding that the wages and/or fringe benefits in a collective bargaining agreement are substantially at variance with those prevailing in the locality, the payment obligation of such contractor or subcontractor with respect to the wages and fringe benefits contained in the new wage determination shall be applicable as of the date of the Administrative Law Judge's decision or, where the decision is reviewed by the Board of Service Contract Appeals, the date of the decision of the Board of Service Contract Appeals. (See also § 4.163(c).)

(b) Pursuant to section 4(b) of the Act, the application of section 4(c) is made subject to the following variation in the circumstances and under the conditions described: The wage rates and fringe benefits provided for in any collective bargaining agreement applicable to the performance of work under the predecessor contract which is consummated during the period of performance of such contract shall not be effective for purposes of the successor contract under the provisions of section 4(c) of the Act or under any wage determination implementing such section issued pursuant to section 2(a) of the Act, if

(1) In the case of a successor contract for which bids have been invited by formal advertising, notice of the terms of such new or changed collective bargaining agreement is received by the contracting agency less than 10 days before the date set for opening of bids, provided that the contracting agency finds that there is not reasona

ble time still available to notify bid ders; or

(2) Notice of the terms of a new 0: changed collective bargaining agree ment is received by the agency after award of a successor contract to be en tered into pursuant to negotiations of as a result of the execution of a renew al option or an extension of the initial contract term, provided that the con tract start of performance is within 30 days of such award or renewal opticr or extension. If the contract does not specify a start of performance date which is within 30 days from the award, and/or performance of such procurement does not commence within this 30-day period, any notice of the terms of a new or changed col lective bargaining agreement received by the agency not less than 10 days before commencement of the contract will be effective for purposes of the successor contract under section 4(c) and

(3) The limitations in paragraph (b)(1) or (2) of this section shall apply only if the contracting officer has given both the incumbent (predeces sor) contractor and his employees' col lective bargaining representative writ ten notification at least 30 days in advance of all applicable estimated procurement dates, including issue of bid solicitation, bid opening, date award, commencement of negotiations. receipt of proposals, or the commencement date of a contract resulting from a negotiation, option, or extension, as the case may be.

of

§ 4.2 Payment of minimum wage specified in section 6(a)(1) of the Fair Labor Standards Act of 1938 under all service contracts.

Section 2(b)(1) of the Service Contract Act of 1965 provides in effect that, regardless of contract amount. no contractor or subcontractor per forming work under any Federal con tract the principal purpose of which is to furnish services through the use of service employees shall pay any of his employees engaged in such work less than the minimum wage specified in section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended ($2.90 per hour beginning January 1.,

1979, $3.10 per hour beginning January 1, 1980, and $3.35 per hour after December 31, 1980).

§4.3 Wage determinations.

(a) The minimum monetary wages and fringe benefits for service employees which the Act requires to be specified in contracts and bid solicitations subject to section 2(a) thereof will be set forth in wage determinations ssued by the Administrator. Wage deerminations shall be issued as soon as administratively feasible for all conEracts subject to section 2(a) of the Act, and will be issued for all contracts entered into under which more than 5 Service employees are to be employed.

(b) Such wage determinations will set forth for the various classes of service employees to be employed in 'urnishing services under such coneracts in the appropriate localities, ninimum monetary wage rates to be Daid and minimum fringe benefits to De furnished them during the periods when they are engaged in the performance of such contracts, including, where appropriate under the Act, provisions for adjustments in such mininum rates and benefits to be placed in effect under such contracts at specidied future times. The wage rates and ringe benefits set forth in such wage determinations shall be determined in accordance with the provisions of secions 2(a)(1), (2), and (5), 4(c) and 4(d) of the Act from those prevailing in the ocality for such employees, with due Consideration of the rates that would be paid for direct Federal employment of any classes of such employees whose wages, if federally employed, would be determined as provided in 5 J.S.C. 5341 or 5 U.S.C. 5332, or from pertinent collective bargaining agreenents with respect to the implementaion of section 4(c). The wage rates And fringe benefits so determined for any class of service employees to be engaged in furnishing covered conEract services in a locality shall be nade applicable by contract to all service employees of such class employed to perform such services in the ocality under any contract subject to Section 2(a) of the Act which is enwered into thereafter and before such letermination has been rendered obso

lete by a withdrawal, modification, or supersedure.

(c) Generally, wage determinations issued for solicitations or negotiations for any contract where the place of performance is unknown will contain minimum monetary wages and fringe benefits for the various geographic localities where the work may be performed which were identified in the initial solicitation (see § 4.4(a)(2)(i)).

(d) Wage determinations will be available for public inspection during business hours at the Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, Washington, DC, and copies will be made available on request at Regional Offices of the Wage and Hour Division.

§ 4.4 Notice of intention to make a service contract.

(a)(1) For any contract exceeding $2,500 which may be subject to the Act, the contracting agency shall file with the Wage and Hour Division, Employment Standards Administration, Department of Labor, its notice of intention to make a service contract. With respect to recurring or known requirements, such notices shall be filed not less than 60 days (nor more than 120 days, except with the approval of the Wage and Hour Division) prior to: (i) Any invitation for bids, (ii) request for proposals, (iii) commencement of negotiations, (iv) exercise of option or contract extension, (v) annual anniversary date of a multi-year contract subject to annual fiscal appropriations of the Congress, or (vi) each biennial anniversary date of a multi-year contract not subject to such annual appropriations, if so authorized by the Wage and Hour Division. (See § 4.4(d).) Notices with regard to solicitations where such planning is not feasible shall be submitted as soon as possible, but not later than 30 days prior to the above contracting actions. Such notice shall be submitted on Standard Form 98, Notice of Intention to Make a Service Contract, and Standard Form 98-A or a statement containing the information in paragraph (b) of this section and shall be completed in accordance with the instruction provided and

shall be supplemented by the information required under paragraphs (c) and (d) of this section. Supplies of Standard Forms 98 and 98-A are available in all GSA supply depots under stock numbers 7540-926-8972 and 7540-118-1008, respectively. If there exists any question or doubt as to the possible application of the Act to a particular procurement, the contracting agency shall submit such question in a timely manner to the Administrator for determination.

(2)(i) Where the place of performance of a contract for services subject to the Act is unknown at the time of solicitation, the solicitation need not initially contain a wage determination. The contracting agency shall, upon identification of firms participating in the procurement in response to an initial solicitation, file with the Wage and Hour Division, Employment Standards Administration, Department of Labor, its notice of intention to make a service contract. In addition to the requirements contained in paragraph (a)(1) of this section, such submission shall identify each location where the work may be performed as indicated by participating firms. Subsequent amendments to the solicitation setting forth the wage determinations and any necessary change in the date and time for submission of final bids shall be made upon receipt of wage determinations. An applicable wage determination must be obtained for each firm participating in the bidding for the location in which it would perform the contract. The appropriate wage determination shall be incorporated in the resultant contract documents and shall be applicable to all work performed thereunder (regardless of whether the successful contractor subsequently changes the place(s) of contract performance).

(ii) There may be unusual situations, as determined by the Department of Labor upon consultation with a contracting agency, where the procedure in paragraph (a)(2)(i) of this section is not practicable in a particular situation, in which event the Department may authorize a modified procedure which may result in the subsequent issuance of wage determinations for one or more composite localities.

(b) The contracting agency shall file with its Notice of Intention to Make a Service Contract (SF-98) either a Standard Form 98-A or a statement in writing, containing the following information concerning the service em ployees expected by the agency to be employed by the contractor and any subcontractors in performing the con

tract:

(1) The number of such employees of all classes, or a statement indicating whether such number will or will not exceed 5, the number for which the inclusion of a wage determination in the contract is mandatory under the provi sions of section 10 of the Act as set forth in § 4.3(a); and

(2) A listing of those classes of serv ice employees expected to be employed under the contract which, if employed by the agency, would be subject to the wage provisions of 5 U.S.C. 5341 or 5 U.S.C. 5332, together with a specification of the rates of wages and fringe benefits that would be paid by the Government to employees of each such class if such statute were applicable to them. (Under section 2(a)(5) of the Act and § 4.6 the inclusion of such a statement in the service contract is also required.)

(c) If the services to be furnished under the proposed contract will be substantially the same as services being furnished in the same locality by an incumbent contractor whose contract the proposed contract will succeed, and if such incumbent contractor is furnishing such services through the use of service employees whose wage rates and fringe benefits are the subject of one or more collec tive bargaining agreements, the con tracting agency shall file with its Notice of Intention to Make a Service Contract (SF-98) a copy of each such collective bargaining agreement to gether with any related documents specifying the wage rates and fringe benefits currently or prospectively payable under such agreement. If the place of contract performance is unknown, the contracting agency will submit the collective bargaining agree ment of the incumbent contractor for incorporation into a wage determina tion applicable to a potential bidder 10cated in the same geographic area as