52.222-41 Service Contract Labor Standards.

As prescribed in 22.1006(a), insert the following clause:

Service Contract Labor Standards (Aug 2018)

(a) Definitions. As used in this clause—

Contractor, when this clause is used in any subcontract, shall be deemed to refer to the

subcontractor, except in the term "Government Prime Contractor."

Service employee means any person engaged in the performance of this contract other than any

person employed in a bona fide executive, administrative, or professional capacity, as these terms

are defined in Part 541 of Title 29, Code of Federal Regulations, as revised. It includes all such

persons regardless of any contractual relationship that may be alleged to exist between a Contractor

or subcontractor and such persons.

(b) Applicability. This contract is subject to the following provisions and to all other applicable

provisions of 41 U.S.C. chapter 67, Service Contract Labor Standards, and regulations of the

Secretary of Labor (29 CFR Part 4). This clause does not apply to contracts or subcontracts

administratively exempted by the Secretary of Labor or exempted by 41 U.S.C. 6702, as interpreted

in Subpart C of 29 CFR Part 4.

(c) Compensation.

(1) Each service employee employed in the performance of this contract by the Contractor or any

subcontractor shall be paid not less than the minimum monetary wages and shall be furnished fringe

benefits in accordance with the wages and fringe benefits determined by the Secretary of Labor, or

authorized representative, as specified in any wage determination attached to this contract.

(2)

(i) If a wage determination is attached to this contract, the Contractor shall classify any class of

service employee which is not listed therein and which is to be employed under the contract (i.e., the

work to be performed is not performed by any classification listed in the wage determination) so as

to provide a reasonable relationship (i.e., appropriate level of skill comparison) between such

unlisted classifications and the classifications listed in the wage determination. Such conformed

class of employees shall be paid the monetary wages and furnished the fringe benefits as are

determined pursuant to the procedures in this paragraph (c).

(ii) This conforming procedure shall be initiated by the Contractor prior to the performance of

contract work by the unlisted class of employee. The Contractor shall submit Standard Form (SF)

1444, Request For Authorization of Additional Classification and Rate, to the Contracting Officer no

later than 30 days after the unlisted class of employee performs any contract work. The Contracting

Officer shall review the proposed classification and rate and promptly submit the completed SF 1444

(which must include information regarding the agreement or disagreement of the employees’

authorized representatives or the employees themselves together with the agency recommendation),

and all pertinent information to the Wage and Hour Division, U.S. Department of Labor. The Wage

and Hour Division will approve, modify, or disapprove the action or render a final determination in
the event of disagreement within 30 days of receipt or will notify the Contracting Officer within 30

days of receipt that additional time is necessary.

(iii) The final determination of the conformance action by the Wage and Hour Division shall be

transmitted to the Contracting Officer who shall promptly notify the Contractor of the action taken.

Each affected employee shall be furnished by the Contractor with a written copy of such

determination or it shall be posted as a part of the wage determination.

(iv)

(A) The process of establishing wage and fringe benefit rates that bear a reasonable relationship to

those listed in a wage determination cannot be reduced to any single formula. The approach used

may vary from wage determination to wage determination depending on the circumstances.

Standard wage and salary administration practices which rank various job classifications by pay

grade pursuant to point schemes or other job factors may, for example, be relied upon. Guidance

may also be obtained from the way different jobs are rated under Federal pay systems (Federal

Wage Board Pay System and the General Schedule) or from other wage determinations issued in the

same locality. Basic to the establishment of any conformable wage rate(s) is the concept that a pay

relationship should be maintained between job classifications based on the skill required and the

duties performed.

(B) In the case of a contract modification, an exercise of an option, or extension of an existing

contract, or in any other case where a Contractor succeeds a contract under which the classification

in question was previously conformed pursuant to paragraph (c) of this clause, a new conformed

wage rate and fringe benefits may be assigned to the conformed classification by indexing (i.e.,

adjusting) the previous conformed rate and fringe benefits by an amount equal to the average

(mean) percentage increase (or decrease, where appropriate) between the wages and fringe benefits

specified for all classifications to be used on the contract which are listed in the current wage

determination, and those specified for the corresponding classifications in the previously applicable

wage determination. Where conforming actions are accomplished in accordance with this paragraph

prior to the performance of contract work by the unlisted class of employees, the Contractor shall

advise the Contracting Officer of the action taken but the other procedures in subdivision (c)(2)(ii) of

this clause need not be followed.

(C) No employee engaged in performing work on this contract shall in any event be paid less than

the currently applicable minimum wage specified under section 6(a)(1) of the Fair Labor Standards

Act of1938, as amended.

(v) The wage rate and fringe benefits finally determined under this paragraph (c)(2) of this clause

shall be paid to all employees performing in the classification from the first day on which contract

work is performed by them in the classification. Failure to pay the unlisted employees the

compensation agreed upon by the interested parties and/or finally determined by the Wage and

Hour Division retroactive to the date such class of employees commenced contract work shall be a

violation of the Service Contract Labor Standards statute and this contract.

(vi) Upon discovery of failure to comply with paragraph (c)(2) of this clause, the Wage and Hour

Division shall make a final determination of conformed classification, wage rate, and/or fringe

benefits which shall be retroactive to the date such class or classes of employees commenced

contract work.

(3) Adjustment of compensation. If the term of this contract is more than 1 year, the minimum
monetary wages and fringe benefits required to be paid or furnished thereunder to service

employees under this contract shall be subject to adjustment after 1 year and not less often than

once every 2 years, under wage determinations issued by the Wage and Hour Division.

(d) Obligation to furnish fringe benefits. The Contractor or subcontractor may discharge the

obligation to furnish fringe benefits specified in the attachment or determined under paragraph

(c)(2) of this clause by furnishing equivalent combinations of bona fide fringe benefits, or by making

equivalent or differential cash payments, only in accordance with Subpart D of 29 CFR Part 4.

(e) 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 person performing work under

this contract (regardless of whether the person is a service employee) less than the minimum wage

specified by section 6(a)(1) of the Fair Labor Standards Act of1938. Nothing in this clause shall

relieve the Contractor or any subcontractor of any other obligation under law or contract for

payment of a higher wage to any employee.

(f) Successor contracts. If this contract succeeds a contract subject to the Service Contract Labor

Standards statute under which substantially the same services were furnished in the same locality

and service employees were paid wages and fringe benefits provided for in a collective bargaining

agreement, in the absence of the minimum wage attachment for this contract setting forth such

collectively bargained wage rates and fringe benefits, neither the Contractor nor any subcontractor

under this contract shall pay any service employee performing any of the contract work (regardless

of whether or not such employee was employed under the predecessor contract), less than the

wages and fringe benefits provided for in such collective bargaining agreement, to which such

employee would have been 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 limitations of 29 CFR 4.1 b(b) apply or unless the Secretary of Labor

or the Secretary’s authorized representative finds, after a hearing as provided in 29 CFR 4.10 that

the wages and/or fringe benefits provided for in such agreement are substantially at variance with

those which prevail for services of a character similar in the locality, or determines, as provided in

29 CFR 4.11, that the collective bargaining agreement applicable to service employees employed

under the predecessor contract was not entered into as a result of arm’s length negotiations. Where

it is found in accordance with the review procedures provided in 29 CFR 4.10 and/or 4.11 and Parts6

and 8 that some or all of the wages and/or fringe benefits contained in a predecessor Contractor’s

collective bargaining agreement are substantially at variance with those which prevail for services of

a character similar in the locality, and/or that the collective bargaining agreement applicable to

service employees employed under the predecessor contract was not entered into as a result of

arm’s length negotiations, the Department will issue a new or revised wage determination setting

forth the applicable wage rates and fringe benefits. Such determination shall be made part of the

contract or subcontract, in accordance with the decision of the Administrator, the Administrative

Law Judge, or the Administrative Review Board, as the case may be, irrespective of whether such

issuance occurs prior to or after the award of a contract or subcontract (53 Comp. Gen. 401 (1973)).

In the case of a wage determination issued solely as a result of a finding of substantial variance,

such determination shall be effective as of the date of the final administrative decision.

(g) Notification to employees. The Contractor and any subcontractor under this contract shall notify

each service employee commencing work on this contract of the minimum monetary wage and any

fringe benefits required to be paid pursuant to this contract, or shall post the wage determination

attached to this contract. The poster provided by the Department of Labor (Publication WH 1313)

shall be posted in a prominent and accessible place at the work site. Failure to comply with this

requirement is a violation of 41 U.S.C. 6703 and of this contract.
(h) 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, hazardous, or dangerous to the health or safety of the service

employees. The Contractor or subcontractor shall comply with the safety and health standards

applied under 29 CFR Part 1925.

(i) Records.

(1) The Contractor and each subcontractor performing work subject to the Service Contract Labor

Standards statute shall make and maintain for 3 years from the completion of the work, and make

them available for inspection and transcription by authorized representatives of the Wage and Hour

Division, a record of the following:

(i) For each employee subject to the Service Contract Labor Standards statute-

(A) Name and address and social security number;

(B) Correct work classification or classifications, rate or rates of monetary wages paid and fringe

benefits provided, rate or rates of payments in lieu of fringe benefits, and total daily and weekly

compensation;

(C) Daily and weekly hours worked by each employee; and

(D) Any deductions, rebates, or refunds from the total daily or weekly compensation of each

employee.

(ii) For those classes of service employees not included in any wage determination attached to this

contract, wage rates or fringe benefits determined by the interested parties or by the Administrator

or authorized representative under the terms of paragraph (c) of this clause. A copy of the report

required by subdivision (c)(2)(ii) of this clause will fulfill this requirement.

(iii) Any list of the predecessor Contractor’s employees which had been furnished to the Contractor

as prescribed by paragraph (n) of this clause.

(2) The Contractor shall also make available a copy of this contract for inspection or transcription by

authorized representatives of the Wage and Hour Division.

(3) Failure to make and maintain or to make available these records for inspection and transcription

shall be a violation of the regulations and this contract, and in the case of failure to produce these

records, the Contracting Officer, upon direction of the Department of Labor and notification to the

Contractor, shall take action to cause suspension of any further payment or advance of funds until

the violation ceases.

(4) The Contractor shall permit authorized representatives of the Wage and Hour Division to conduct

interviews with employees at the work site during normal working hours.

(j) Pay periods. The Contractor shall unconditionally pay to each employee subject to the Service

Contract Labor Standards statute all wages due free and clear and without subsequent deduction

(except as otherwise provided by law or regulations, 29 CFR Part 4), rebate, or kickback on any

account. These payments shall be made no later than one pay period following the end of the regular

pay period in which the wages were earned or accrued. A pay period under this statute may not be
of any duration longer than semi-monthly.

(k) Withholding of payments and termination of contract. The Contracting Officer shall withhold or

cause to be withheld from the Government Prime Contractor under this or any other Government

contract with the Prime Contractor such sums as an appropriate official of the Department of Labor

requests or such sums as the Contracting Officer decides may be necessary to pay underpaid

employees employed by the Contractor or subcontractor. In the event of failure to pay any

employees subject to the Service Contract Labor Standards statute all or part of the wages or fringe

benefits due under the Service Contract Labor Standards statute, the Contracting Officer may, after

authorization or by direction of the Department of Labor and written notification to the Contractor,

take action to cause suspension of any further payment or advance of funds until such violations

have ceased. Additionally, any failure to comply with the requirements of this clause may be grounds

for termination of the right to proceed with the contract work. In such event, the Government may

enter into other contracts or arrangements for completion of the work, charging the Contractor in

default with any additional cost.

(l) Subcontracts. The Contractor agrees to insert this clause in all subcontracts subject to the

Service Contract Labor Standards statute.

(m) Collective bargaining agreements applicable to service employees. If wages to be paid or fringe

benefits to be furnished any service employees employed by the Government Prime Contractor or

any subcontractor under the contract are provided for in a collective bargaining agreement which is

or will be effective during any period in which the contract is being performed, the Government

Prime Contractor shall report such fact to the Contracting Officer, together with full information as

to the application and accrual of such wages and fringe benefits, including any prospective

increases, to service employees engaged in work on the contract, and a copy of the collective

bargaining agreement. Such report shall be made upon commencing performance of the contract, in

the case of collective bargaining agreements effective at such time, and in the case of such

agreements or provisions or amendments thereof effective at a later time during the period of

contract performance such agreements shall be reported promptly after negotiation thereof.

(n) Seniority list. Not less than 10 days prior to completion of any contract being performed at a

Federal facility where service employees may be retained in the performance of the succeeding

contract and subject to a wage determination which contains vacation or other benefit provisions

based upon length of service with a Contractor (predecessor) or successor (29 CFR 4.173), the

incumbent Prime Contractor shall furnish the Contracting Officer a certified list of the names of all

service employees on the Contractor’s or subcontractor’s payroll during the last month of contract

performance. Such list shall also contain anniversary dates of employment on the contract either

with the current or predecessor Contractors of each such service employee. The Contracting Officer

shall turn over such list to the successor Contractor at the commencement of the succeeding

contract.

(o) Rulings and interpretations. Rulings and interpretations of the Service Contract Labor Standards

statute are contained in Regulations, 29 CFR Part 4.

(p) Contractor’s certification.

(1) By entering into this contract, the Contractor (and officials thereof) certifies that neither it nor

any person or firm who has a substantial interest in the Contractor’s firm is a person or firm

ineligible to be awarded Government contracts by virtue of the sanctions imposed under 41 U.S.C.

6706.
(2) No part of this contract shall be subcontracted to any person or firm ineligible for award of a

Government contract under 41 U.S.C. 6706.

(3) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 U.S.C. 1001.

(q) Variations, tolerances, and exemptions involving employment. Notwithstanding any of the

provisions in paragraphs (b) through (o) of this clause, the following employees may be employed in

accordance with the following variations, tolerances, and exemptions, which the Secretary of Labor,

pursuant to 41 U.S.C. 6707 prior to its amendment by Pub.L.92-473, found to be necessary and

proper in the public interest or to avoid serious impairment of the conduct of Government business:

(1) Apprentices, student-learners, and workers whose earning capacity is impaired by age, physical

or mental deficiency, or injury may be employed at wages lower than the minimum wages otherwise

required by 41 U.S.C. 6703(1) without diminishing any fringe benefits or cash payments in lieu

thereof required under 41 U.S.C. 6703(2), in accordance with the conditions and procedures

prescribed for the employment of apprentices, student-learners, persons with disabilities, and

disabled clients of work centers under section 14 of the Fair Labor Standards Act of 1938, in the

regulations issued by the Administrator (29 CFR parts 520, 521, 524, and 525).

(2) The Administrator will issue certificates under the statute for the employment of apprentices,

student-learners, persons with disabilities, or disabled clients of work centers not subject to the Fair

Labor Standards Act of 1938, or subject to different minimum rates of pay under the two statutes,

authorizing appropriate rates of minimum wages (but without changing requirements concerning

fringe benefits or supplementary cash payments in lieu thereof), applying procedures prescribed by

the applicable regulations issued under the Fair Labor Standards Act of 1938 (29 CFR parts 520,

521, 524, and 525).

(3) The Administrator will also withdraw, annul, or cancel such certificates in accordance with the

regulations in 29 CFR parts 525 and 528.

(r) Apprentices. Apprentices will be permitted to work at less than the predetermined rate for the

work they perform when they are employed and individually registered in a bona fide apprenticeship

program registered with a State Apprenticeship Agency which is recognized by the U.S. Department

of Labor, or if no such recognized agency exists in a State, under a program registered with the

Office of Apprenticeship Training, Employer, and Labor Services (OATELS), U.S. Department of

Labor. Any employee who is not registered as an apprentice in an approved program shall be paid

the wage rate and fringe benefits contained in the applicable wage determination for the

journeyman classification of work actually performed. The wage rates paid apprentices shall not be

less than the wage rate for their level of progress set forth in the registered program, expressed as

the appropriate percentage of the journeyman’s rate contained in the applicable wage

determination. The allowable ratio of apprentices to journeymen employed on the contract work in

any craft classification shall not be greater than the ratio permitted to the Contractor as to his entire

work force under the registered program.

(s) Tips. An employee engaged in an occupation in which the employee customarily and regularly

receives more than $30 a month in tips may have the amount of these tips credited by the employer

against the minimum wage required by 41 U.S.C. 6703(1), in accordance with section 3(m) of the

Fair Labor Standards Act and Regulations, 29 CFR Part 531. However, the amount of credit shall not

exceed $1.34 per hour beginning January 1,1981. To use this provision-

(1) The employer must inform tipped employees about this tip credit allowance before the credit is

utilized;
(2) The employees must be allowed to retain all tips (individually or through a pooling arrangement

and regardless of whether the employer elects to take a credit for tips received);

(3) The employer must be able to show by records that the employee receives at least the applicable

Service Contract Labor Standards minimum wage through the combination of direct wages and tip

credit; and

(4) The use of such tip credit must have been permitted under any predecessor collective bargaining

agreement applicable by virtue of 41 U.S.C. 6707(c).

(t) Disputes concerning labor standards. The U.S. Department of Labor has set forth in 29 CFR parts

4, 6, and 8 procedures for resolving disputes concerning labor standards requirements. Such

disputes shall be resolved in accordance with those procedures and not the Disputes clause of this

contract. Disputes within the meaning of this clause include disputes between the Contractor (or any

of its subcontractors) and the contracting agency, the U.S. Department of Labor, or the employees

or their representatives.

(End of clause)

Parent topic: 52.222 [Reserved]