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- FLSA Section 14(c) Advisor

McNamara-O’Hara Service Contract Act (SCA) Coverage

An employer with a 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, is covered under the McNamara-O’Hara Service Contract Act (SCA). This includes employers who operate work centers.

All contracts in excess of $2,500, or for an indefinite amount, require a wage determination specifying the prevailing wages and fringe benefits that must be paid to various classes of service employees, including those with disabilities, who perform the contracted work. Service employees performing on SCA contracts that are $2500 or less must receive at least the Federal minimum wage.

The SCA allows an employer to pay service employees who have disabilities special minimum wages—wages less than the prevailing wage required by the wage determination—in a manner similar to that authorized by FLSA Section 14(c). However, contractors are still required to pay the full fringe benefits, or the equivalent cash payment in lieu of providing the benefits, to service employees with disabilities who perform the contracted work.

All laborers, mechanics, guards, and watchmen—with or without disabilities— performing as service employees on SCA contracts in excess of $100,000 are also entitled to overtime pay under the Contract Work Hours Safety Standards Act (CWHSSA).

Fact Sheet No. 39F, The Payment of Special Minimum Wages to Workers with Disabilities Who Are Employed on Federal Service Contracts Subject to the McNamara-O'Hara Service Contract Act, provides more general information about the employment of workers with disabilities on contracts subject to the SCA.

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FLSA Section 14(c) Advisor | Wage and Hour Division