Service Contract Act



Why Do Government Employees Need A Union?

In today's pro-business economic climate, workers more than ever need to join together and form a union. As corporations seem motivated more and more by the bottom line many good, loyal workers are beginning to suffer and only through working as a group and forming a union can they survive with a measure of dignity and pride.

The IBEW has long represented workers in the Government Sector or workers who are employed by Federal Government contractors. Not only do IBEW rperesented employees have generally higher wages wages and better benefits, additionally have the full force of nearly 700,000 other IBEW Members behind them to help enforce meaningful Grievance & Dispute procedures.

For employees of contractors performing services for the US Government they have the advantage of the provisions of the "Service Contract Act.


Q: What is the Service Contract Act?

A: The Service Contract Act of 1965, as amended, provides labor standards for certain persons employed by Federal Contractors to furnish services to Federal agencies.

Q: How are wages determined under the Service Contract Act?

A: For UNREPRESENTED employees, minimum wages are determined by the US Department of Labor by doing periodic wage surveys in the locality in which the Service Contract employees work. Then, they issue a document which is called, 'Wage Determination.' 

For REPRESENTED employees who engage in collective bargaining, the wages and benefits negotiated, as a result of 'arms length negotiations,' replace and serve as the minimum prevailing wage for that particular service contract.

Q: How are fringe benefits determined under the Service Contract Act?

A: For UNREPRESENTED employees, the same wage determination lists minimum fringe benefits. The Dept. of Labor has established two rates: a Low Rate and a High Rate. The Low Rate is rising and the High Rate is fixed. The Low is currently, $1.63 per hour; and the High Rate is fixed at $2.56 per hour. 

But, for REPRESENTED employees, fringe benefits negotiated as a result of 'arms length negotiations' shall become the minimum fringe benefits for that particular Service Contract. Your IBEW Contract controls.

Q: What happens when a new Service Contractor takes over the Service Contract on which I am working?

A: Under the Service Contract Act, a new Service Contractor is not required to hire any of the existing Service Contract employees. For UNREPRESENTED employees, the new Service Contractor who has won the bid away from the current Service Contractor, only has the obligation to pay the minimum rates established by the Department of Labor's wage determination. And, they can work with less people, for less hours, lower classifications! Remember, the contract is many times 'let to the lowest bidder.' 

For REPRESENTED employees, section 4C of the Service Contract Act, provides that no contractor who succeeds a previous Contractor, will pay any service employee under such contract less than the wages and fringe benefits (including accrued wages and fringe benefits) provided for in the collective bargaining agreement.

 Normally, when a service contract is being re-bid, the competing Contractors will contact the Union representative and attempt to reach an agreement on the conversion and indicate so in their bid insuring that labor peace prevails. With a skilled workforce like yours, virtually all Contractors will agree to honor the terms and conditions of the collective bargaining agreement.

Q: Will my employer suffer a loss in profits if they pay more than the Department of Labor's determined rates, because of my Collective Bargaining Agreement?

A: When your employer pays UNREPRESENTED employees wages and benefits which are higher than provided for in the Department of Labor's wage determination, those increases will affect profits. However, wages and benefits negotiated for REPRESENTED employees are passed through to the customer, usually the federal government, once a year: normally this is effective October 1, of each year.

Q: Well, isn't this unfair to the Government?

A: NO! The are two reasons why; first if the negotiated wages and benefits are at valiance the affected Government Agency can challenge. The second reason is Government believes 'Collective bargaining at arms length' is the very best way to determine wages and benefits. The Government has confidence that private sector contractors and their employees who engage in collective bargaining will reach the very best rate. 

That's why the Service Contract Act recognizes and honors rates and benefits negotiated at 'arms length' through collective bargaining. The U.S. Government knows that the Service Contract Act has saved billions of dollars for tax payers and still delivers quality services to the customer.

Q. How can my fellow workers and I gain the advantage of IBEW Union Representation?

The first step in gaining IBEW union representation is to contact an IBEW Organizer to talk about the particulars of your situation. To contact an IBEW Organizer through e-mail click here .

Full text of the Service Contract Act:
Click here
to read the Act as defined in the U.S. Code.

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