FAR 52.222-41 — Service Contract Labor Standards
What It Is
FAR 52.222-41 implements the Service Contract Labor Standards statute (long known as the Service Contract Act, or SCA) on covered service contracts over $2,500. It requires the contractor to pay its service employees at least the wages and fringe benefits set out in the Department of Labor wage determination incorporated into the contract for the locality, and to post the required notice to employees. The wage determination lists minimum hourly rates and fringe amounts by labor category; the clause also addresses conformance of unlisted job classes, recordkeeping, and the consequences of underpayment (including withholding and liability for back wages). On multi-year and option contracts, updated wage determinations can change your labor costs at each option.
When It Applies
- Service contracts over $2,500 whose principal purpose is to furnish services through service employees (janitorial, maintenance, security, IT support, and many others).
- With an incorporated Department of Labor wage determination setting locality minimum wages and fringe benefits by labor category.
- Across base and option periods, where a revised wage determination at option exercise can change required labor costs.
Key Provisions
| Provision | What It Means |
|---|---|
| Prevailing wage & fringe | Service employees must be paid at least the wage and fringe-benefit amounts in the incorporated DOL wage determination for their labor category and locality. |
| Wage determination governs | The contract incorporates a DOL wage determination; it, not your internal pay scale, sets the floor for covered employees. |
| Conformance of new classes | If a needed labor class is not in the wage determination, it must be 'conformed' (added at an appropriate rate) through a defined process. |
| Underpayment consequences | Failure to pay required wages/fringe can lead to withholding of contract funds, liability for back wages, and potential debarment from future contracts. |
What It Means for an SDVOSB
If you bid SCA-covered services, the wage determination is the foundation of your price — under-reading it is a classic way SDVOSBs lose money on a won contract or run afoul of compliance. Build your labor rates up from the determination's minimums plus fringe, plan for conformance of any labor class not listed, and budget for wage-determination increases at each option period. Compliance is enforced through fund withholding and back-wage liability, so accurate payroll and recordkeeping protect both your margin and your eligibility for future work. Use the price-to-win calculator with the determination's rates as your floor.
Common Pitfalls
- Pricing labor below the incorporated wage determination's minimums plus fringe, then being squeezed or found non-compliant.
- Forgetting to conform labor classes that the work requires but the wage determination does not list.
- Ignoring that a revised wage determination at option exercise can raise your costs — and failing to seek the price adjustment the contract may allow.
Run the Numbers
Frequently Asked
Does the Service Contract Labor Standards clause apply to my SDVOSB services contract?
It applies to covered service contracts over $2,500 whose principal purpose is furnishing services through service employees. If FAR 52.222-41 is in your contract, you must pay the service employees at least the wages and fringe benefits in the Department of Labor wage determination incorporated for the locality and labor categories. Many janitorial, maintenance, security, and support-services set-asides are SCA-covered, so check the wage determination before you price.
What happens to my wage costs when an option period is exercised?
On a multi-year or option contract, the Department of Labor often issues a revised wage determination, and the updated minimum wages and fringe benefits apply going forward. Your labor costs can rise at option exercise, but the contract typically includes a price-adjustment mechanism (such as FAR 52.222-43) so you can recover the increased wage-determination costs. Plan for these increases when you price the base and options.
Primary Sources
- FAR 52.222-41 — Service Contract Labor Standards
- FAR 22.1006 — Solicitation provisions and contract clauses (SCLS)
Plain-English reference, not legal advice. Which clauses apply, and in which version, is set by the specific solicitation, and the FAR is periodically amended — always read the actual clause text in your solicitation and confirm its application with your contracting officer before relying on this.
Change log (1)
- LaunchedPublished the federal contract clauses reference covering the standard FAR Part 52 clauses an SDVOSB encounters in a set-aside contract — the SDVOSB set-aside clause (52.219-27), limitations on subcontracting (52.219-14), utilization of small business concerns (52.219-8), the reps-and-certs provisions (52.204-8 / 52.212-3), the commercial terms clauses (52.212-4 / 52.212-5), Changes (52.243-1), Termination for Convenience and Default (52.249-2 / 52.249-8), Prompt Payment and EFT payment (52.232-25 / 52.232-33), Service Contract Labor Standards (52.222-41), and basic cybersecurity safeguarding (52.204-21) — each with a key-provisions table, common pitfalls, an SDVOSB-specific angle, FAQPage, Legislation, Dataset, and BreadcrumbList structured data, primary-source FAR citations, and cross-links into the glossary, forms reference, contract types, regulation explainers, how-to guides, FAQ, and the limitations-on-subcontracting and price-to-win calculators.