SCA Compliance Checklist

Look for FAR clause 52.222-41 (Service Contract Labor Standards) in your contract. If it's there, and a Wage Determination is attached, the SCA applies. The SCA covers service contracts exceeding $2,500, including work like janitorial, security, food service, IT support, and administrative services.

Your Wage Determination is the single most important compliance document. It specifies the minimum hourly wage for each job classification, the required Health & Welfare (H&W) fringe benefit rate, and vacation and holiday entitlements for your contract's geographic area.

Each employee performing work on the contract must be assigned to a job classification listed in the Wage Determination. Misclassification is one of the most common SCA violations. If an employee's duties don't match any listed classification, you must submit a conformance request (SF 1444) to the Department of Labor within 30 days.

SCA compliance requires tracking hours at the contract level, not just total hours worked. If an employee splits time between SCA and non-SCA work, or across multiple SCA contracts, you need to capture that breakdown every day. This is the foundation of every compliance calculation you'll run.

For odd-numbered Wage Determinations (roughly 95% of SCA contracts), your weekly H&W obligation per employee equals the H&W rate multiplied by compensated hours, capped at 40 hours per week. Compensated hours include all paid time: hours worked, vacation, sick leave, and holidays. See our full calculation guide for worked examples.

You can meet the H&W obligation through bona fide benefits (employer-paid health insurance, dental, vision, life, disability, 401k contributions), through cash-in-lieu payments (paid directly to the employee as additional wages), or any combination of the two. Only employer-paid benefit costs count; employee payroll deductions do not.

The SCA requires payroll records that clearly separate base wages from fringe benefit amounts. If your pay stubs lump everything together, the DOL may presume the entire amount was for wages, leaving you liable for back-pay on benefits. Records must be retained for three years after contract completion.

Before contract performance begins, you must display two documents at each worksite in a prominent, accessible location: DOL Publication WH-1313 ("Notice to Employees Working on Government Contracts") and the Wage Determination attached to your contract.

If you use subcontractors to perform any services under the contract, you must include FAR 52.222-41 and the applicable Wage Determination in every subcontract, regardless of dollar value. As the prime contractor, you are liable for your subcontractors' compliance failures.

DOL found violations in 68% of SCA cases investigated. The best way to avoid being part of that statistic is to run compliance calculations every pay period and conduct a thorough self-audit at least once a year. Catching a shortfall early means a small cash-in-lieu payment instead of a large back-pay liability.