An Act to provide labor standards for certain persons employed by, Federal contractors to furnish services to Federal agencies, and for other purposes.
PL 89-286 (H.R.10238), enacted 10/22/1965

1034 
October 22, 1965 
[ H . R . 10238] 
Service Con-
tract Act of 
1965. 
Required con-
tract provisions. 
Minimum wage$. 
Fringe benefits. 
Safe working 
conditions. 
Notice of com-
pensation to em-
ployees. 
Wage specifica-
tions. 
75 Stat. 67. 
PUBLIC LAW 89-286-OCT. 22, 1965 
[79 STAT. 
Public Law 89-286 
AN ACT 
To provide labor standards for certain persons euiployetl by Federal contractors 
to furnish services to Federal agencies, and foi- otlier puri>oses. 
Be it enacted hy the Senate and House of Bepresentatives 
of the 
United States of America in Congress assembled^ That this Act may 
be cited as the "Service Contract Act of 1965". 
SEC. 2. (a) Every contract (and any bid specification therefor) 
entered into by the United States or the District of Columbia in excess 
of $2,500, except as provided in section 7 of this Act, whether nego-
tiated or advertised, the principal purpose of which is to furnish 
services in the United States through the use of service employees, 
as defined herein, shall contain the following: 
(1) A provision specifying the minimum monetary wages to 
be paid the various classes of service employees in the perform-
ance of the contract or any subcontract thereunder, as determined 
by the Secretary, or his authorized representative, in accordance 
with prevailing rates for such employees in the locality, which in 
no case shall be lower than the minimum specified in subsec-
tion (b). 
(2) A provision specifying the fringe benefits to be furnished 
the various classes of service employees, engaged in the perform-
ance of the contract or any subcontract thereunder, as determined 
by the Secretary or his authorized representative to be prevailing 
for such employees in the locality. 
Such fringe benefits shall 
include medical or hospital care, pensions on retirement or death, 
compensation for injuries or illness resulting from occupational 
activity, or insurance to provide any of the foregoing, miemploy-
ment benefits, life insurance, disability and sickness insurance, 
accident insurance, vacation aud holiday pay, costs of apprentice-
ship or other similar programs and other bona fide fringe benefits 
not otherwise required by Federal, State, or local law to be pro-
vided by the contractor or subcontractor. The obligation mider 
this subparagraph may l)e discharged by fuiiiishing any equiva-
lent combinations of fringe benefits or by making ecjuivalent pi" 
differential payments in cash under rules and regulations estab-
lished by the Secretary. 
(3) A provision that no part of the services covered by this Act 
will be performed in buildings or surroundings or under working 
conditions, provided by or under the control or supervision of the 
contractor or any subcontractor, which are unsanitary or hazard-
ous or dangerous to the health or safety of service employees 
engaged to furnish the services. 
(4) A provision that on the date a service employee commences 
work on a contract to which this Act applies, the contractor or sub-
contractor will deliver to the employee a notice of the compensa-
tion required under paragraphs (1) and (2) of this subsection, on 
a form prepared by the Federal agency, or will post a notice of 
the required compensation in a prominent place at the worksite. 
(b) (1) Xo contractor who enters into any contract with the Federal 
Government the principal purpose of which is to furnish services 
through the use of service employees as defined herein and no sub-
contractor thereunder shall pay any of his employees engaged in 
I)erforming work on such contracts less than the minimum wage 
specified under section 6(a) (1) of the Fair Labor Standards Act 
of 1938, as amended (52 Stat. 1060; 29 U.S.C. 201, et seq.). 
(2) The provisions of sections 3,4, and 5 of this Act shall be appli-
cable to violations of this subsection. 
79 STAT. ] 
PUBLIC LAW 89-286-OCT. 22, 1965 
1035 
SEC. 3, (a) Any violation of any of the contract stipulations 
required by section 2(a) (1) or (2) or of section 2(b) of this Act shall 
render the party responsible therefor liable for a sum equal to the 
amount of any deductions, rebates, refunds, or underpayment of com-
pensation due to any employee engaged in the performance of such 
contract. 
So much of the accrued payment due on the contract or 
any other contract between the same contractor and the Federal 
Government may be withheld as is necessary to pay such employees. 
Such withheld sums shall be held in a deposit fund. 
On order of the 
Secretary, any compensation which the head of the Federal agency 
or the Secretary has found to be due pursuant to this Act shall be 
paid directly to the underpaid employees from any accrued payments 
withheld under this Act. 
(b) In accordance w4th regulations prescribed pursuant to section 
4 of this Act, the Federal agencj head or the Secretary is hereby 
authorized to carry out the provisions of this section. 
(c) In addition, when a violation is found of any contract stipula-
tion, the contract is subject upon written notice to cancellation by 
the contracting agency. Whereupon, the United States may enter 
into other contracts or arrangements for the completion of the original 
contract, charging any additional cost to the original contractor. 
SEC. 4. (a) Sections 4 and 5 of the Act of June 30,1936 (49 Stat. 
2036), as amended, shall govern the Secretary's authority to enforce 
this Act, make rules, regulations, issue orders, hold hearings, and 
make decisions based upon findings of fact, and take other appropriate 
action hereunder. 
(b) The Secretary may provide such reasonable limitations and 
may make such rules and regulations allowing reasonable variations, 
tolerances, and exemptions to and from any or all provisions of this 
Act as he may find necessary and proper in the public interest or to 
avoid serious impairment of the conduct of Government business. 
SEC. 5. (a) The Comptroller General is directed to distribute a 
list to all agencies of the Government giving the names of persons 
or firms that the Federal agencies or the Secretary have found to have 
violated this Act. 
Unless the Secretary otherwise recommends, no 
contract of the United States shall be awarded to the persons or firms 
appearing on this list or to any firm, corporation, partnership, or asso-
ciation in which such persons or firms have a substantial interest until 
three years have elapsed from the date of publication of the list con-
taining the name of such persons or firms. 
(b) If the accrued payments withheld under the terms of the con-
tract are insufficient to reimburse all service employees with respect 
to whom there has been a failure to pay the compensation required 
pursuant to this Act, the United States may bring action against the 
contractor, subcontra<!tor, or any sureties in any court of competent-
jurisdiction to recover the remaining amount of underpayments. 
A n j 
sums thus recovered by the L'nited States shall be held in the deposit 
fund and shall be paid, on order of the Secretary, directly to the 
underpaid employee or employees. Any sum not paid to an employee 
because of inability to do so within three years shall be covered into 
the Treasury of the United States as miscellaneous receipts. 
SEC. 6. In determining any overtime pay to which sucli service 
employees are entitled under any Federal law, the regular or basic 
hourly rate of pay of such an employee shall not include any fringe 
benefit payments computed hereunder which are excluded from the 
regular rate under the Fair Labor Standards Act by provisions of 
section 7(d) thereof. 
SEC. 7. This Act shall not apply to— 
Violations, 
penalties. 
Contract can-
cellation. 
Enforcement 
authority. 
41 use 38, 39. 
List of viola-
tors. 
Legal action. 
Overtime pay. 
63 Stat. 913. 
29 u s e 207. 
Exemptions. 
1036 
PUBLIC LAW 89-286-OCT. 22, 1965 
[79 STAT. 
(1) any coniract of the United States or District of Columbia 
for construction, alteration and/or repair, including painting and 
decorating of public buildings or public works; 
(2) any work required to be done in accordance with the provi-
41 use 35 note. 
gj^^j^g ^f ^j^^ Walsh-Healey Public Contracts Act (4-9 Stat. 2036); 
(3) any contract for the carriage of freight or personnel by 
vessel, airplane, bus, truck, express, railway line or oil or gas pipe-
line where published tarijff rates are in effect; 
(4) any contract for the furnishing of services by radio, 
telephone, telegraph, or cable companies, subject to the Commu-
48 Stat. 1064.^^ 
ulcations Act of 1934; 
notl."^^ ^°^ ^" 
(5) any contract for public utility services, including electric 
light and power, water, steam, and gas; 
(6) any employment contract providing for direct services to a 
Federal agency by an individual or individuals; and 
(7) any contract with the Post Office Department, the principal 
purpose of which is the operation of postal contract stations. 
Definitions. 
g^c. 8. For the purposes of this Act— 
(a) "Secretary" means Secretary of Labor. 
(b) The term "service employee" means guards, watchmen, and 
any person engaged in a recognized trade or craft, or other skilled 
mechanical craft, fyr in unskilled, semiskilled, or skilled manual labor 
occupations; and any other employee including a foreman or super-
visor in a position having trade, craft, or laboring experience as the 
paramount requirement; and shall include all such persons regard-
less of any contractual relationship that may be alleged to exist 
between a contractor or subcontractor and such persons. 
(c) The term "compensation" means any of the payments or fringe 
benefits described in section 2 of this Act. 
(d) The term "United States" when used in ii geographical sense 
shall include any State ,of the United States, the District of Columbia, 
Puerto Rico, the Virgin Islands, Outer Continental Shelf lands as 
67 Stat. 462. 
defined in the Outer Continental Shelf Lands Act, American Samoa, 
note."^^ ^^^^ 
Guam, Wake Island, Eniwetok Atoll, Kwajalein Atoll, Johnston 
Island, but shall not include any other teiTitoiy mider the jurisdic-
tion of the United States ,or any United States base or possession 
within a foreign country. 
Effective date. 
^^^ 
9 -pj^jg .^^.|. gj^g^ij apply to all contracts entered into pursuant 
to negotiations concluded or invitations for bids issued on or after 
ninety days from the date of enactment of this Act. 
Approved October 22, 1965.