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Confused about the application of the Service Contract Act

Trenton, NJ |

When working for a company that is a subsidiary of a parent company that has government contracts, how does the service contract act apply to employees working on said government contracts but are employed by the subsidiary company. Does the act still apply? If so, does this apply to all government contracts the employee works on?

Attorney Answers 1


The SCA is implemented in government prime contracts primarily by inclusion of the contract clause at 48 C.F.R. (FAR) 52.222-41. The clause generally requires that all non-exempt personnel performing work under a services contract be paid at least the prevailing wages and benefits per labor classification as identified by the Department of Labor in a wage determination that is attached to or referenced in the contract. The requirements of the clause apply to all service personnel performing work under the contract without regard to whether they are employees of the prime contractor or a subcontractor, and could cover service employees of a subsidiary.

The SCA is quite complicated and there are various exemptions and exceptions. You should consult an attorney to discern SCA application under your particular circumstances.

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