§ 4.5 Contract minimum wage determinations and fringe benefit specifications. Any contract agreed upon in excess of $2,500 shall contain the minimum wages and fringe benefits specified in any applicable currently effective determination including any expressed in any document referred to in paragraph (a) or (b) of this section. (a) Any communication from the Administrator of the Wage and Hour and Public Contracts Divisions of the Department of Labor responsive to the notice required by § 4.4; or (b) Any revision of the register of wages and fringe benefits prior to the award of the contract or contracts, but revisions received by the Federal agency later than 10 days before the opening of bids, in the case of contracts entered into pursuant to competitive bidding procedures, shall not be effective except where the Federal agency finds that there is a reasonable time to notify bidders of the revision. To avoid serious impairment of the conduct of Government business, it is hereby found necessary and proper to provide exemption (1) from the determined wage and fringe benefits section of the Act (2(a) (1) and (2)), but not the minimum wage specified under section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended (2(b) of this Act), of all contracts for which no such wage or fringe benefit has been determined for any class of service employees to be employed thereunder and (2) from the fringe benefits section (2(a) (2)) of all contracts and of all classes of service employees employed thereunder if no such benefits have been determined for any such class of service employees. Accordingly, such exemptions are hereby provided. These exemptions do not extend to undetermined wages or fringe benefits in contracts for which one or more, but not all, classes of service employees are the subject of an applicable wage determination. See § 4.6(b). (c) If the notice of intention required by § 4.4(a) is not filed within the time provided in § 4.4(a), the contracting agency shall exercise any and all of its power that may be needed (including where necessary, its power to negotiate, its power to pay any necessary additional costs, and its power under any provision of the contract authorizing changes) to include in the contract any determinations communicated to it within 30 days of the filing of such notice or of the discovery by the Wage and Hour and Public Contracts Divisions, U.S. Department of Labor, of such omission. [33 F.R. 9880, July 10, 1968, as amended at 34 F.R. 555, Jan. 15, 1969] § 4.6 Labor standards clauses for Federal service contracts exceeding $2,500. The clauses set forth in the following paragraphs shall be included in every contract (and any bid specification therefor) entered into by the United States or the District of Columiba, in excess of $2,500, the principal purpose of which is to furnish services through the use of service employees: (a) Service Contract Act of 1965: This contract, to the extent that it is of the character to which the Service Contract Act of 1965 (79 Stat. 1034, 41 U.S.C. 351) applies, is subject to the following provisions and to all other applicable provisions of the Act and the regulations of the Secretary of Labor thereunder (this Part 4). (b) Each service employee employed in the performance of this contract by the contractor or any subcontractor shall be paid not less than the minimum monetary wage and shall be furnished fringe benefits in accordance with the wages and fringe benefits determined by the Secretary of Labor or his authorized representative, as specified in any attachment to this contract. If there is such an attachment, any class of service employees which is not listed therein, but which is to be employed under this contract, shall be classified by the contractor so as to provide a reasonable relationship between such classifications and those listed in the attachment, and shall be paid such monetary wages and furnished such fringe benefits as are determined by agreement of the interested parties, who shall be deemed to be the contracting agency, the contractor, and the employees who will perform on the contract or their representatives. If the interested parties do not agree on a classification or reclassification which is, in fact, conformable, the contracting officer shall submit the question, together with his recommendation, to the Administrator of the Wage and Hour and Public Contracts Divisions of the Department of Labor or his authorized representative for final determination. Failure to pay such employees the compensation agreed upon by the interested parties or finally determined by the Administrator or his authorized representative shall be a violation of this contract. No employee engaged in performing work on this contract shall in any event be paid less than the minimum wage specified under section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended ($1.60 per hour). (c) The contractor or subcontractor may discharge the obligation to furnish fringe benefits specified in the attachment or determined conformably thereto by furnishing any equivalent combinations of fringe benefits, or by making equivalent or differential payments in cash, pursuant to applicable rules of the Administrator of the Wage and Hour and Public Contracts Divisions of the Department of Labor. (Subpart B of this part.) (d) In the absence of a minimum wage attachment for this contract, neither the contractor nor any subcontractor under this contract shall pay any of his employees performing work under the contract (regardless of whether they are service employees) less than the minimum wage specified by section 6(a) (1) of the Fair Labor Standards Act of 1938 ($1.60 per hour). However, in cases where section 6(e) (2) of the Fair Labor Standards Act of 1938 is applicable, the rates specified therein will apply. Nothing in this provision shall relieve the contractor or any subcontractor of any other obligation under law or contract for the payment of a higher wage to any employee. (e) The contractor and any subcontractor under this contract shall notify each service employee commencing work on this contract of the minimum monetary wage and any fringe benefits required to be paid pursuant to this contract, or shall post a notice of such wages and benefits in a prominent and accessible place at the worksite, using such poster as may be provided by the Department of Labor. (f) The contractor or subcontracto shall not permit any part of the service called for by this contract to be per formed in buildings or surrounding or under working conditions provided by or under the control or supervision o the contractor or subcontractor which are unsanitary or hazardous or danger ous to the health or safety of servic employees engaged to furnish these serv ices. Except insofar as a noncomplianc can be justified as provided in § 1516.1 (c) of this title, this will require complianc with the applicable standards, specifica tions, and codes developed and publishe by the U.S. Department of Labor, an other agency of the United States, and any nationally recognized professiona organization such as, without limitation the following: National Bureau of Standards, U.S. Depart ment of Commerce. Public Health Service, U.S. Department o American National Standards Institute, Ind (United States of America Standard Institute). National Fire Protection Association. American Society of Mechanical Engineers American Society for Testing and Materials American Conference of Governmental In dustrial Hygienists. Information as to the latest standards specifications, and codes applicable t the contract is available at the office o the Director of the Bureau of Labo Standards, U.S. Department of Labor Railway Labor Building, 400 First Stree NW., Washington, D.C. 20212, or at an of the regional offices of the Bureau o Labor Standards as follows: 1. North Atlantic Region, 341 Ninth Ave nue, Room 920, New York, N.Y. 10001 (Cor necticut, Maine, Massachusetts, Ne Hampshire, New York, Rhode Island, Ve mont, New Jersey, and Puerto Rico). 2 Middle Atlantic Region, Room 410, Pen Square Building, Juniper and Filbert Street Philadelphia, Pa. 19107 (Delaware, Distri of Columbia, Maryland, North Carolin Pennsylvania, Virginia, and West Virginia 3. South Atlantic Region, 1371 Peachtr Street NE., Suite 723, Atlanta, Ga. 303 (Alabama, Florida, Georgia, Mississipp South Carolina, and Tennessee). 4. Great Lake Region, 848 Federal Offi Building, 219 South Dearborn Street, Ch cago, Ill. 60604 (Illinois, Indiana, Kentuck Michigan, Minnesota, Ohio, and Wisconsin 5. Mid-Western Region, 1906 Federal Offi Building, 911 Walnut Street, Kansas City, M 64106 (Colorado, Idaho, Iowa, Kansas, M 50-065-71-3 souri, Montana, Nebraska, North Dakota, South Dakota, Utah, and Wyoming). 6. Western Gulf Region, 411 North Akard Street, Room 601, Dallas, Tex. 75201 (Arkansas, Louisiana, New Mexico, Oklahoma, and Texas). 7. Pacific Region, 10353 Federal Building, 450 Golden Gate Avenue, Box 36017, San Francisco, Calif. 94102 (Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington, and Guam). (g) The contractor and each subcontractor performing work subject to the Act shall make and maintain for 3 years from the completion of the work records containing the information specified below for each employee subject to the Act and shall make them available for inspection and transcription by authorized representatives of the Administrator of the Wage and Hour and Public Contracts Divisions of the U.S. Department of Labor. (1) His name and address. (2) His work classification or classifications, rate or rates of monetary wages and fringe benefits provided, rate or rates of fringe benefit payments in lieu thereof, and total daily and weekly compensation. (3) His daily and weekly hours so worked. (4) Any deductions, rebates, or refunds from his total daily or weekly compensation. (5) A list of monetary wages and fringe benefits for those classes of service employees not included in the minimum wage attachment to this contract, but for which such wage rates or fringe benefits have been determined by the interested parties or by the Administrator or his authorized representative pursuant to the labor standards clause in paragraph (b) of this section. A copy of the report required by the clause in paragraph (k) of this section shall be deemed to be such a list. (h) The contracting officer shall withhold or cause to be withheld from the Government Prime Contractor under this or any other Government contract with the prime contractor such sums as he, or an appropriate officer of the Labor Department, decides may be necessary to pay underpaid employees. Additionally, any failure to comply with the requirements of these clauses relating to the Service Contract Act of 1965 may be grounds for termination of the right to proceed with the contract work. In such event, the Government may enter into other contracts or arrangements for completion of the work, charging the contractor in default with any additional cost. (i) The contractor agrees to insert these clauses relating to the Service Contract Act of 1965 in all subcontracts. The term "contractor" as used in these clauses in any subcontract, shall be deemed to refer to the subcontractor, except in the term "Government Prime Contractor." (j) As used in these clauses relating to the Service Contract Act of 1965, the term "service employee" means guards, watchmen, and any person engaged in a recognized trade or craft, or other skilled mechanical craft, or in unskilled, semiskilled, or skilled manual labor occupations; and any other employee including a foreman or supervisor in a position having trade, craft, or laboring experience as the paramount requirement; and shall include all such persons regardless of any contractual relationship that may be alleged to exist between a contractor or subcontractor and such persons. (k) If there is a wage determination attachment to this contract and one or more classes of service employees which are not listed thereon are to be employed under the contract, the contractor shall report to the contracting officer the monetary wages to be paid and the fringe benefits to be provided each such class of service employee. Such report shall be made promptly as soon as such compensation has been determined as provided in the clause in paragraph (b) of this section. (1) All interpretations of the Service Contract Act of 1965 expressed in Subpart C of this part, are hereby incorporated by reference in this contract. (m) These clauses relating to the Service Contract Act of 1965 shall not apply to the following: (1) Any contract 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 provisions of the Walsh-Healey Public Contracts Act (49 Stat. 2036); (3) Any contract for the carriage of freight or personnel by vessel, airplane, bus, truck, express, railway line, or oil or gas pipeline where published tariff rates are in effect, or where such carriage is subject to rates covered by section 22 of the Interstate Commerce Act; (4) Any contract for the furnishing of services by radio, telephone, telegraph, or cable companies, subject to the Communications Act of 1934; (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; (7) Any contract with the Post Office Department, the principal purpose of which is the operation of postal contract stations. (8) Any services to be furnished outside the United States. For geographic purposes, the "United States" is defined in section 8(d) of the Service Contract Act to include any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf Lands as defined in the Outer Continental Shelf Lands Act, American Samoa, Guam, Wake Island, Eniwetok Atoll, Kwajalein Atoll, Johnston Island. It does not include any other territory under the jurisdiction of the United States or any United States base or possession within a foreign country. (9) Any of the following contracts exempted from all provisions of the Service Contract Act of 1965, pursuant to section 4(b) of the Act, which exemptions the Secretary of Labor hereby finds necessary and proper in the public interest or to avoid serious impairment of the conduct of Government business: Contracts entered into by the United States with common carriers for the carriage of mail by rail, air (except air star routes), bus, and ocean vessel, where such carriage is performed on regularly scheduled runs of the trains, airplanes, buses, and vessels over regularly established routes and accounts for an insubstantial portion of the revenue therefrom. (n) Notwithstanding any of the clauses in paragraphs (b) through (1) of this section, relating to the Service Contract Act of 1965, the following employees may be employed in accordance with the following variations, tolerances, and exemptions, which the Secretary of Labor hereby finds pursuant to section 4(b) of the Act to be necessary and proper in the public interest or to avoid serious impairment of the conduct of Government business: (1) (i) Apprentices, student-learners, and workers whose earning capacity is impaired by age, physical, or mental deficiency or injury may be employed at wages lower than the minimum wages otherwise required by section 2(a) (1) or 2(b) (1) of the Service Contract Act of 1965, without diminishing any fringe benefits or cash payments in lieu thereof required under section 2(a)(2) of that Act, in accordance with the procedures prescribed for the employment of apprentices, student-learners, handicapped persons, and handicapped clients of sheltered workshops under section 14 of the Fair Labor Standards Act of 1938, in the regulations issued by the Administrator of the Wage and Hour and Public Contracts Divisions of the Department of Labor (Parts 520, 521, 524, and 525 of this title). (ii) The Administrator will issue certificates under the Service Contract Act of 1965 for the employment of apprentices, student-learners, handicapped persons, or handicapped clients of sheltered workshops not subject to the Fair Labor Standards Act of 1938, or subject to different minimum rates of pay under the two acts, authorizing appropriate rates of minimum wages (but without changing requirements concerning fringe benefits or supplementary cash payments in lieu thereof), applying procedures prescribed by the applicable regulations is sued under the Fair Labor Standards Ac of 1938 (Parts 520, 521, 524, and 525 o this title). (iii) The Administrator will also with draw, annul, or cancel such certificate in accordance with the regulations i Parts 525 and 528 of Title 29 of the Cod of Federal Regulations. (2) An employee engaged in an occu pation in which he customarily and reg ularly receives more than $20 a mont in tips may have the amount of his tip credited by his employer against the mir imum wage required by section 2(a) (1 or section 2(b)(1) of the Act, in accordance with the regulations in Part 531 of this title: Provided, however, That the amount of such credit may not exceed 80 cents per hour. [33 F.R. 9880, July 10, 1968, as amended at 35 F.R. 883, Jan. 22, 1970] § 4.7 Labor standards clause for Federal service contracts not exceeding $2,500. Every contract with the Federal Government which is not in excess of $2,500 but has as its principal purpose the furnishing of services through the use of service employees shall contain the following clause: Service Contract Act of 1965. Except to the extent that an exemption, variation or tolerance would apply pursuant to 29 CFR 4.6 i this were a contract in excess of $2,500, the contractor and any subcontractor hereunder shall pay all of his employees engaged in performing work on the contract not less than the minimum wage specified under section 6(a)(1) of the Fair Labor Standards Act of 1988, as amended ($1.60 per hour). However, in cases where section 6(e) (2) of the Fair Labor Standards Act of 1938 is applicable, the rates specified therein will apply. All regulations and interpretations of the Service Contract Act of 1965 expressed in 29 CFR Part 4 are hereby incorporated by reference in this contract. Whenever an agency of the United States or the District of Columbia shall award a contract in excess of $2,500 subject to the Act, it shall furnish the Administrator of the Wage and Hour and Public Contracts Divisions, on the form used pursuant to 41 CFR 50-201.1201, the information required by such form. Subpart B-Equivalents of Deter mined Fringe Benefits § 4.51 Discharging fringe benefit obligations by equivalent methods. Section 2(a) (2) of the Act, which provides for fringe benefits that are separate from and additional to the monetary compensation required under section 2(a) (1), permits an employer to discharge his obligation to provide the specified fringe benefits by furnishing any equivalent combinations of "bona fide" fringe benefits or by making equivalent or differential payments in cash. However, credit for such payments is limited to the employer's fringe benefit obligations under section 2(a) (2), since the Act does not authorize any part of the monetary wage required by section 2(a) (1) and specified in the wage determination and the contract, to be offset by the fringe benefit payments or equivalents which are furnished or paid pursuant to section 2(a) (2). §4.52 Equivalent fringe benefits. Under this Act, fringe benefit obligations may be discharged by furnishing, in lieu of those fringe benefits determined by the Secretary and specified in the contract, other bona fide fringe benefits which the contractor or subcontractor is not required by statute to provide, or any combination of such bona fide fringe benefits: Provided, That they are "equivalent" in terms of monetary cost to the employer. Thus, if an applicable determination specifies that 10 cents per hour is to be paid into a pension fund, this fringe benefit obligation will be deemed to be met if instead, hospitalization benefits costing not less than 10 cents per hour are provided. The same obligation will be met if hospitalization benefits costing 5 cents an hour and holiday pay equal to 5 cents an hour in cash are provided. No benefit required to be furnished the employee by any other law, such as workmen's compensation, may be credited toward satisfying the fringe benefit requirements of the Act. § 4.53 Cash equivalents. (a) Fringe benefit obligations may be discharged by paying, in addition to the monetary wage required, a cash amount per hour in lieu of the specified fringe benefits provided such amount is equivalent to the cost of the fringe benefits required. If, for example, an employee's monetary rate under an applicable determination is $1.90 an hour, and the fringe benefits to be furnished are hospitalization benefits costing 10 cents an hour and retirement benefits costing 10 cents an hour, the fringe benefit obligation is discharged if instead of furnishing the required fringe benefits the employer pays the employee, in cash, 20 cents per hour as the cash equivalent of the fringe benefits in addition to the $1.90 per hour required under the applicable wage determination. (b) The hourly cash equivalent of those fringe benefits which are not listed in the applicable determination in terms of hourly cash amount may be obtained by mathematical computation through the use of pertinent factors such as the monetary wages paid the employee and |