Compliance Tips for Service Contract Act (SCA) and Davis-Bacon Act Requirements

Government contractors working on federally funded service and construction contracts must comply with labor regulations that protect worker wages and benefits. Two major statutes—the Service Contract Act (SCA) and the Davis-Bacon Act—impose strict rules, and failing to follow them can lead to penalties, contract termination, or debarment.

Here are key compliance tips for Service Contract Act (SCA) requirements:

• Know the Wage Determination (WD): Every contract subject to SCA includes a WD that outlines minimum wages and fringe benefits for each labor category. Review it carefully and update it when the contract renews.
• Classify Employees Correctly: Misclassifying labor categories can trigger DOL investigations. Match job descriptions to the WD’s labor classifications.
• Track Hours Accurately: Maintain detailed records of hours worked per employee, especially for those working across contracts.
• Pay Required Fringe Benefits: Benefits can be paid in cash or through bona fide benefit plans—but they must be documented and verifiable.
• Audit Your Payroll Regularly: Periodic internal reviews can help you catch issues before the Department of Labor does.

At N5 Specialized Accounting Services & Support, we help government contractors stay compliant with SCA and Davis-Bacon requirements, from payroll setup to documentation audits. Staying proactive with labor compliance protects your contracts and your reputation.