The requirements of the Equal Opportunity clause regarding solicitations or advertisements for employees placed by or on behalf of a contractor or subcontractor will be satisfied whenever the contractor or subcontractor complies with any of the following:

(a) States expressly in the solicitations or advertising that all qualified applicants will receive consideration for employment without regard to race, creed, color, or national origin;

(b) Uses display or other advertising, and the advertising includes an appropriate insignia prescribed by the Director. The use of the insignia is considered subject to the provisions of 18 U.S.C. 701;

(c) Uses a single advertisement, and the advertisement is grouped with other advertisements under a caption which clearly states that all employers in the group assure all qualified applicants equal consideration for employment without regard to race, creed, color, or national origin; and

(d) Uses a single advertisement in which appears in clearly distinguishable type the phrase "an equal opportunity employer."

§ 1-12.814 Existing contracts and subcontracts.

All contracts and subcontracts in effect prior to October 24, 1965, which are not subsequently modified shall be administered in accordance with the nondiscrimination provisions of any prior applicable Executive orders. Any contract or subcontract modified on or after October 24, 1965, shall be subject to Executive Order No. 11246. Complaints received by and violations coming to the attention of agencies regarding contracts and subcontracts

'On and after Oct. 14, 1968, the term "race, color, religion, sex, or national origin" is substituted for the term "race, creed, color, or national origin," as provided by Executive Order No. 11375, Oct. 13, 1967 (32 FR 14803).

§ 1-12.900 Scope of subpart.1

This subpart sets forth policies and procedures for carrying out the provisions of the Service Contract Act of 1965, as amended by Pub. L. 92-473, October 9, 1972 and Pub. L. 94-489, October 13, 1976 (41 U.S.C. 351-357), the provisions of the Fair Labor Standards Act of 1938, as amended by Pub. L. 93-259, April 8, 1974 and Pub. L. 95-151, November 1, 1977, (29 U.S.C. 201-219), and the implementing regulations and instructions (29 CFR Parts 4 and 1925) issued by the Secretary of Labor, as they pertain to service contracts.

[43 FR 11987, Mar. 23, 1978]

§ 1-12.901 Statutory requirements. 1

The Service Contract Act of 1965 (Pub. L. 89-286, sometimes hereinafter referred to in this subpart as the "Act") embraces two general requirements with respect to service contracts entered into by Federal agencies.

(a) Regardless of contract amount, no contractor or subcontractor holding a Federal service contract 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 (29 U.S.C. 201, et seq.).

(b) Federal service contracts in excess of $2,500 shall contain the provisions required by the Act with respect to such matters as minimum wages, including fringe benefits, to be paid the various classes of service employees engaged in the performance of the contract, safe and sanitary work

For a document relating to this section, see Appendix-Temporary Regulations, appearing at the end of Chapter 1.

ing conditions, and notification to employees of the compensation required under the Act.

(c) The Act, as amended, and the Department of Labor's regulations impose on successor contractors certain requirements with respect to the payment of wages and fringe benefits based on those agreed upon for substantially the same services at the same location in collective bargaining agreements entered into by their pred

ecessor

contractors (unless such agreed compensation is substantially at variance with that which prevails locally or the agreement was not negotiated at arm's length). The Act also requires the Secretary of Labor to give effect to the provisions of such collective bargaining agreements in his wage determinations under section 2 of the act. In addition, the Act requires that Government service contracts include a statement of the rates applicable to the wages that would be paid by the contracting agency if the agency employed directly the classes of service employees to be employed on the contract work. Employees so directly employed by the agency would receive wages determined in accordance with the provisions of 5 U.S.C 5341. In this connection, the Secretary of Labor is required by the Act to give due consideration to such rates in determining minimum monetary wages and fringe benefits. A further provision of the Act is designed to insure extension of coverage by wage determinations of the Secretary to substantially all service contracts subject to section 2(a) of the Act at the earliest administratively feasible time. The Act also provides (in addition to the conditions previously specified for issuance of administrative limitations, variations, tolerances, and exemptions) that administrative action in this regard shall be taken only in special circumstances where the Secretary determines that it is in accord with the remedial purpose of the Act to protect prevailing labor standards. As amended, the Act provides for the award of service contracts where the term of the contract does not exceed 5 years. It also provides for periodic adjustments of minimum wage rates and fringe benefits payable thereunder by the issuance of

wage determinations by the Secretary of Labor during the term of the contract. With respect to violations, the Act requires that when a contractor is found to have violated the Act the name of the contractor shall be submitted for inclusion on the debarment list not later than 90 days after the hearing examiner's finding of violation unless the Secretary of Labor recommends relief. However, such recommendations for relief may be made only in unusual circumstances.

[31 FR 11, Jan. 4, 1966, as amended at 37 FR 26714, Dec. 15, 1972; 43 FR 11987, Mar. 23, 1978]

$1-12.902 Applicability.

Subject to statutory exemptions (see § 1-12.902-3) or administrative exemptions by the Secretary of Labor under section 4(b) of the Act (see § 1-12.9024):

(a) The requirement set forth in § 112.901(a) applies to any contract with the Federal Government, the principal purpose of which is to furnish services through the use of service employees (as defined in § 1-12.902-2).

(b) The requirement set forth in § 112.901(b) applies to every contract (and any bid specification therefor) entered into by the Federal Government in excess of $2,500, whether negotiated or advertised, the principal purpose of which is to furnish services through the use of service employees (as defined in § 1-12.902-2).

§ 1-12.902-1 Geographical coverage of the Act.

(a)(1) Inside the United States, the Act is applicable to all service contracts irrespective of amount.

(2) The Act is not applicable to any services to be furnished outside the United States.

(b) When used in a geographical sense, the term "United States" is defined in the Act to include any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf lands as defined in the Outer Continental Shelf Lands Act, American Samoa, Guam, Wake Island, Eniwetok Atoll, Kwajalein Atoll, Johnston Island, but shall not include any other territory under the jurisdiction of the United

For the purposes of this subpart, unless otherwise indicated, the terms used therein are defined as follows:

(a) "Service employee" means any person engaged in the performance of a contract entered into by the United States and not exempted under section 7 of the Act (FPR § 1-12.902-3), whether negotiated or advertised, the principal purpose of which is to furnish services in the United States (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); and shall include all such persons regardless of any contractural relationship that may be alleged to exist between a contractor or subcontractor and such person.

(b) “Secretary" includes the Secretary of Labor, the Assistant Secretary of Labor for Employment Standards, and their authorized representatives.

(c) "Administrator" means the Deputy Assistant Secretary for Employment Standards in the Employment Standards Administration of the Department of Labor who is also Administrator of the Wage and Hour Division, or his authorized representative as set forth in this part. In the absence of the Deputy Assistant Secretary/Wage-Hour Administrator, the Deputy Administrator of the Wage and Hour Division/Director of Office of Wage and Compensation Programs is designated to act for him with respect to matters covered by this subpart. Except as otherwise provided in this subpart, the Assistant Administrator is the authorized representative of the Administrator for the performance of functions relating to the making and effectuating of wage de

'For a document relating to this section, see Appendix-Temporary Regulations, appearing at the end of chapter 1.

terminations under the Service Contract Act of 1965, as amended, and this subpart.

(d) "Office of Special Wage Standards" (OSWS) means the organizational unit in the Employment Standards Administration to which is assigned the performance of functions of the Secretary under the Service Contract Act of 1965, as amended.

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

(f) "Contractor" includes a subcontractor whose subcontract is subject to provisions of the Act.

(g) "Wage determination" includes any determination of minimum wage rates or fringe benefits made pursuant to the provisions of section 2(a) 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, as amended.

(h) "Act," "Service Contract Act," or "Service Contract Act of 1965" shall mean the Service Contract Act of 1965, as amended by Public Law 92473, October 9, 1972, and Pub. L. 94– 487 October 13, 1976 (41 U.S.C. 351357).

[43 FR 11988, Mar. 23, 1978]

§ 1-12.902-3 Statutory exemptions.

(a) Each of the following transactions is exempted from the Service Contract Act of 1965 by the terms thereof:

(1) Contracts for construction or repair. Any contracts of the United States for construction, alteration, and/or repair, including painting and decorating of public buildings or public works.

(2) Contracts under the WalshHealey Public Contracts Act. Any work required to be done in accordance with the provisions of the Walsh-Healey Public Contracts Act.

(3) Contracts for the carriage of freight or personnel. Any contract for the carriage of freight or personnel by vessel, airplane, bus, truck, express, railway line or oil or gas pipeline

where published tariff rates are in effect.

(4) Contracts for communication services. Any contract for the furnishing of services by radio, telephone, telegraph, or cable companies, subject to the Communications Act of 1934.

(5) Contracts for public utility services. Any contract for public utility services, including electric light and power, water, steam, and gas.

(6) Employment contracts. Any employment contract providing for direct services to a Federal agency by an individual or individuals.

(7) Operation of postal contract stations. The Act exempts contracts with the Post Office Department, the principal purpose of which is the operation of postal contract stations.

§ 1-12.903 Department of Labor regulations.

The Department of Labor has issued Parts 4 and 25, Title 29, Code of Federal Regulations, providing for the administration and enforcement of the Act. The regulations include coverage of the following matters relating to the requirements of the Act:

(a) Service contract labor standards and procedures (see 29 CFR Subpart A, Part 4);

(b) Equivalents of determined fringe benefits (see 29 CFR Subpart B, Part 4);

(c) Application of the Service Contract Act of 1965 (rulings and interpretations, see 29 CFR Subpart C, Part 4);

(d) Safe and sanitary working conditions (see 29 CFR Part 25); and

(e) Rules of practice for administrative proceedings enforcing service contract labor standards (see 29 CFR Part 6).

[33 FR 19080, Dec. 21, 1968, as amended at 43 FR 11988, Mar. 23, 1978]

§ 1-12.904 Contract clauses.

§ 1-12.904-1 Clause for Federal service contracts in excess of $2,500.1

Federal agencies (except as provided in §§ 1-12.902-3 and 4) shall include the following clause in all invitations for bids and requests for proposals which may result in contracts in excess of $2,500 and in contracts in excess of $2,500 (including any transaction for an indefinite amount unless the contracting agency has knowledge that it will not exceed $2,500) where the principal purpose of the contract is to furnish services in the United States through the use of service employees.

SERVICE CONTRACT Act of 1965, AS AMENDED

This contract, to the extent that it is of the character to which the Service Contract Act of 1965, as amended (41 U.S.C. 351-357) applies, is subject to the following provisions and to all other applicable provisions of the Act and regulations of the Secretary of Labor thereunder.

(a) Compensation. Each service employee employed in the performance of this contract by the Contractor or any subcontractor shall be paid not less than the minimum wage and shall be furnished fringe benefits in accordance with the wages and fringe benefits determined by the Secretary of Labor or his authorized representative, as specified in any attachment to this contract. If there is such an attachment, any class of service employees which is not listed therein, but which is to be employed under this contract, shall be classified by the Contractor so as to provide a reasonable relationship between such classifications and those listed in the attachment, and shall be paid such monetary wages and furnished such fringe benefits as are determined by agreement of the interested parties, who shall be deemed to be the contracting agency, the Contractor, and the employees who will perform on the contract or their representatives. If the interested parties do not agree

For a document relating to this section, see Appendix-Temporary Regulations, appearing at the end of Chapter 1.

on a classification or reclassification which is, in fact, conformable, the Contracting Officer shall submit the question, together with his recommendation, to the Office of Special Wage Standards, Employment Standards Administration (ESA), of the Department of Labor for final determination. Failure to pay such employees the compensation agreed upon by the interested parties or finally determined by the Administrator or his authorized representative shall be a violation of this contract. No employee engaged in performing work on this contract shall in any event be paid less than the minimum wage specified under section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended.

(b) Adjustment. 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 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 Employment Standards Administration of the Department of Labor as provided in such Act.

(c) Obligation to furnish prime benefits. 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 fringe benefits, or by making equivalent or differential payments in cash in accordance with the applicable rules set forth in 29 CFR Part 4, Subparts B and C, and not otherwise.

(d) Minimum wage. In the absence of a minimum wage attachment for this contract, neither the Contractor nor any subcontractor under this contract shall pay any of his employees 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 as amended. 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.

(e) Obligations attributable to predecessor contracts. If this contract succeeds a contract, subject to the Service Contract Act of 1965, as amended, under which substantially the same services were furnished and service employees were paid wages and fringe benefits provided for in a collective bargaining agreement, then in the absence of a wage attachment for this contract neither the Contractor nor any subcontractor under this contract shall pay any service employee performing any of the contract work less than the wages and fringe benefits, provided for in such collective bargaining

agreements, to which such employee would be 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 Secretary of Labor or his authorized representative determines that the collective bargaining agreement applicable to service employees employed under the predecessor contract was not entered into as a result of arms-length negotiations, or finds, after a hearing as provided in Department of Labor regulations, 29 CFR 4.10, that the wages and fringe benefits provided for in such agreement are substantially at variance with those which prevail for services of a character similar in the locality.

(f) Notification to employees. The Contractor and any subcontractor under this contract shall notify each service employee commencing work on this contract of the minimum wage and any fringe benefits required to be paid pursuant to this contract, or shall post a notice of such wages and benefits in a prominent and accessible place at the worksite, using such poster as may be provided by the Department of Labor.

(g) Safe and sanitary working conditions. 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.

(h) Records. 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 subparagraphs (1) through (5) of this paragraph for each employee subject to the Act and shall make them available for inspection and transcription by authorized representatives of the Employment Standards Administration of the U.S. Department of

Labor.

(1) His name and address.

(2) His work classification or classifications, rate or rates of monetary wages and fringe benefits provided, rate or rates of fringe benefit payments in lieu thereof, and total daily and weekly compensation.

(3) His daily and weekly hours so worked. (4) Any deductions, rebates, or refunds from his total daily or weekly compensation. (5) A list of monetary wages and fringe benefits for those classes of service employees not included in the minimum wage at