What is the Service Contract Act?
The Service Contract Act (SCA) requires federal service contractors to pay at least the locally prevailing wages and benefits for service workers on federal contracts over $2,500. It is the services equivalent of Davis-Bacon for construction.
The McNamara-O'Hara Service Contract Act of 1965 (41 U.S.C. §6701) requires contractors performing services on federal contracts over $2,500 to pay service employees at least the prevailing wages and fringe benefits determined by the Secretary of Labor.
Like Davis-Bacon, SCA wages are determined by the Department of Labor and published as Wage Determinations on SAM.gov. SCA wage determinations apply to over 300 job classifications including security guards, janitors, food service workers, IT helpdesk, technical professionals, and many others.
SCA covers a much broader range of federal contracting than Davis-Bacon — most federal service contracts (security, janitorial, food service, technical support, base operations) are SCA-covered.
Compliance requirements parallel Davis-Bacon: - Pay at least prevailing wage and fringe rates - Maintain certified payroll records - Post wage determinations and worker notification - Allow DOL audits
A key difference: SCA fringe benefits can be satisfied through actual benefits (health insurance, retirement, vacation) or paid as cash in lieu. Many contractors pay fringe as cash, which has tax implications for both employer and employee.
State and local procurement does not generally trigger SCA, but several states (California, Maryland, Washington, others) have their own state-level service worker wage laws.