Employee Rights Under the Service Contract Act
The McNamara-O’Hara Service Contract Act (SCA) was enacted to give protections to employees of contractors providing services to the federal government or federal agencies. Essentially, the most important protection given to employees is prevailing wage, ensuring that workers receive at least the prevailing wage rate in the location they work.
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What is the Service Contract Act?
The SCA covers eligible employees working for a company providing services to the federal government, including the District of Columbia. To be eligible for protections under the SCA, an employee working for a federal government contractor must be a service employee. If your work furthers the services your employer provides to the federal government, you are a service employee.
For any contract your employer engages in with the federal government that exceeds $2,500 in value, they become subject to the SCA, giving you protections. These protections are generally equal to benefits required of private employers in the locality where your work is being performed.
A key component of the SCA is prevailing wage. If your employer is subject to the SCA, you’re entitled to a San Diego prevailing wage for the work you do. If you think you’re being underpaid, an employment lawyer may be able to help you.
The Department of Labor determines the prevailing wage by considering the average rates and benefits for similar work in San Diego. This prevailing wage is the minimum wage you should be paid. The only exception to this is if the prevailing wage is less than the San Diego minimum wage of $15.00 per hour.
But the SCA doesn’t stop there. You’re also entitled to receive major medical insurance coverage through your employer. If your employer isn’t required to offer medical insurance because they employ fewer than 50 workers, you may be entitled to a specified rate for fringe benefits. Your employer must pay the additional hourly compensation for fringe benefits on all your hours: hours worked, overtime hours, paid time off, and holiday pay. However, employers paying a fringe benefit rate should not use that amount in calculating overtime so your overtime rate is only based on your regular rate of pay.
These benefits under the SCA must be given to all full-time and part-time employees. Seasonal and temporary employees may also be entitled to these benefits.
Does Your Company Have to Comply with the SCA?
This is a complex question. Most often, any contract with the federal government or a federal agency will clearly state the contract is subject to the terms of the SCA. So, if your employer enters into a contract with the federal government, you can look at the contract to see if the SCA is mentioned. Better yet, you can have an employment lawyer review it for you.
But even if you don’t find mention of the SCA in the contract, your employer’s contract may still be subject to the terms of the SCA if the following conditions are met:
- The federal government, a federal agency, or the District of Columbia awarded the contract
- The contract is for services which will be primarily completed by hourly employees
- The contract exceeds $2,500
- The work will be performed within the U.S. or a U.S. territory
Be aware, however, that some contracts are exempt from the SCA. If the contract your employer has entered into pertains to one of the following subjects, then it may be exempt from SCA coverage:
- Public works
- Transporting freight
- Public utility
Contracts may also be exempt from the SCA if they deal directly with administrative exemptions because of public interest. The Secretary of Labor must grant directly these exemptions.
Where to Find Help
If your employer isn’t paying you the prevailing wage isn’t providing you with access to medical coverage or fringe benefits, you can take action. The Wage and Hour Division of the Department of Labor handles complaints by employees whose employers may be in violation of the SCA.
However, you should seek guidance from a San Diego employment attorney. If you’re unsure of your company’s requirements under the SCA, it’s best to seek skilled guidance. Your lawyer can review your company’s contract and quickly determine if the contract is subject to the SCA.
In other cases, you may already know the contract is subject to the SCA, but your employer is not abiding by the terms of the SCA. Even if your employer is making an honest mistake, you have legal options available to you to help you collect the benefits you’re entitled to receive.
If your employer is violating the SCA, that could result in the government withholding contract payments sufficient to cover wage and fringe benefit underpayments. The government could also terminate the contract, take legal action, and bar your employer from receiving government contracts for up to three years.
Contact a San Diego Employment Lawyer Today
When you have questions about the SCA and whether it applies to your employer, don’t try to figure it out yourself. It’s a complex law that needs a skilled eye. A San Diego employment lawyer can discuss your situation with you, determine if your employer is subject to the SCA, and if they’re not complying with the terms of the law, help you take action to get your benefits.