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(6) an employment contract providing for direct services to a Federal 
agency by an individual; and 
(7) a contract with the United States Postal Service, the principal 
purpose of which is the operation of postal contract stations. 
§ 6703. Required contract terms 
A contract, and bid specification for a contract, to which this chapter ap-
plies under section 6702 of this title shall contain the following terms: 
(1) MINIMUM WAGE.—The contract and bid specification shall con-
tain a provision specifying the minimum wage to be paid to each class 
of service employee engaged in the performance of the contract or any 
subcontract, as determined by the Secretary or the Secretary’s author-
ized representative, in accordance with prevailing rates in the locality, 
or, where a collective-bargaining agreement covers the service employ-
ees, in accordance with the rates provided for in the agreement, includ-
ing prospective wage increases provided for in the agreement as a re-
sult of arm’s length negotiations. In any case the minimum wage may 
not be less than the minimum wage specified in section 6704 of this 
title. 
(2) FRINGE BENEFITS.—The contract and bid specification shall 
contain a provision specifying the fringe benefits to be provided to each 
class of service employee engaged in the performance of the contract 
or any subcontract, as determined by the Secretary or the Secretary’s 
authorized representative to be prevailing in the locality, or, where a 
collective-bargaining agreement covers the service employees, to be pro-
vided for under the agreement, including prospective fringe benefit in-
creases provided for in the agreement as a result of arm’s-length nego-
tiations. The fringe benefits shall include medical or hospital care, pen-
sions on retirement or death, compensation for injuries or illness result-
ing from occupational activity, or insurance to provide any of the fore-
going, unemployment benefits, life insurance, disability and sickness in-
surance, accident insurance, vacation and holiday pay, costs of appren-
ticeship or other similar programs and other bona fide fringe benefits 
not otherwise required by Federal, State, or local law to be provided 
by the contractor or subcontractor. The obligation under this para-
graph may be discharged by furnishing any equivalent combinations of 
fringe benefits or by making equivalent or differential payments in cash 
under regulations established by the Secretary. 
(3) WORKING CONDITIONS.—The contract and bid specification shall 
contain a provision specifying that no part of the services covered by 
this chapter may be performed in buildings or surroundings or under 
working conditions, provided by or under the control or supervision of 
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the contractor or any subcontractor, which are unsanitary or hazardous 
or dangerous to the health or safety of service employees engaged to 
provide the services. 
(4) NOTICE.—The contract and bid specification shall contain a pro-
vision specifying that on the date a service employee begins work on 
a contract to which this chapter applies, the contractor or subcon-
tractor will deliver to the employee a notice of the compensation re-
quired under paragraphs (1) and (2), on a form prepared by the Fed-
eral agency, or will post a notice of the required compensation in a 
prominent place at the worksite. 
(5) GENERAL SCHEDULE PAY RATES AND PREVAILING RATE SYS-
TEMS.—The contract and bid specification shall contain a statement of 
the rates that would be paid by the Federal agency to each class of 
service employee if section 5332 or 5341 of title 5 were applicable to 
them. The Secretary shall give due consideration to these rates in mak-
ing the wage and fringe benefit determinations specified in this section. 
§ 6704. Limitation on minimum wage 
(a) IN GENERAL.—A contractor that makes a contract with the Federal 
Government, the principal purpose of which is to furnish services through 
the use of service employees, and any subcontractor, may not pay less than 
the minimum wage specified under section 6(a)(1) of the Fair Labor Stand-
ards Act of 1938 (29 U.S.C. 206(a)(1)) to an employee engaged in per-
forming work on the contract. 
(b) VIOLATIONS.—Sections 6705 to 6707(d) of this title are applicable to 
a violation of this section. 
§ 6705. Violations 
(a) LIABILITY OF RESPONSIBLE PARTY.—A party responsible for a viola-
tion of a contract provision required under section 6703(1) or (2) of this 
title or a violation of section 6704 of this title is liable for an amount equal 
to the sum of any deduction, rebate, refund, or underpayment of compensa-
tion due any employee engaged in the performance of the contract. 
(b) RECOVERY OF AMOUNTS UNDERPAID TO EMPLOYEES.— 
(1) WITHHOLDING ACCRUED PAYMENTS DUE ON CONTRACTS.—The 
total amount determined under subsection (a) to be due any employee 
engaged in the performance of a contract may be withheld from ac-
crued payments due on the contract or on any other contract between 
the same contractor and the Federal Government. The amount with-
held shall be held in a deposit fund. On order of the Secretary, the 
compensation found by the Secretary or the head of a Federal agency 
to be due an underpaid employee pursuant to this chapter shall be paid 
from the deposit fund directly to the underpaid employee. 
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