Service Contract Act (SCA)
A federal law requiring contractors on federal service contracts over $2,500 to pay at least the locally prevailing wages and benefits for service workers.
Definition
The McNamara-O'Hara Service Contract Act of 1965 (41 U.S.C. §6701) covers federal service contracts. SCA wage determinations published by the US Department of Labor specify prevailing wages and fringes for over 300 service worker classifications including janitorial, food service, security guards, technical support, and many others.
When it applies
Most federal service contracts (security, janitorial, food service, IT helpdesk, base operations) are SCA-covered. Compliance requires paying at least prevailing wage and fringe rates, maintaining certified payroll, and following DOL reporting requirements. SCA fringe benefits can be paid in cash or as actual benefits — many contractors pay fringe as cash, but this affects employee tax withholding.