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Service Contract Act
All contractors and subcontractors performing work on federal or District of Columbia prime service contracts in excess of $2500 are required to pay the local prevailing wage and certain fringe benefits by the McNamara-O’Hara Service Contract Act, known as the Service Contract Act or SCA.
The SCA applies to every contract entered into by the United States or the District of Columbia, the principal purpose of which is to furnish services through the use of service employees. Contractors performing on such federal service contracts in excess of $2,500 must observe minimum wage and safety and health standards, and maintain certain records. Service employees on covered contracts in excess of $2,500 must be paid not less than the monetary wages and fringe benefits contained in wage determinations issued by the U.S. Department of Labor (DOL) for the contract work. Such wage and fringe benefit determinations may reflect what has been determined to be prevailing in the locality or may reflect the wage rates and fringe benefits contained in the predecessor contractor’s collective bargaining agreement.