Government Contracts: Service Contract Labor Standards Compliance

Companies performing service-based contracts for the federal government may be required to comply with the Service Contract Labor Standards (SCLS) (formerly the Service Contracts Act), which set out wage and fringe benefit requirements for certain service employees. Government prime contractors and subcontractors subject to the SCLS must understand their compliance obligations, including payment of minimum wages and fringe benefits, provision of sick leave, posting notices, and recordkeeping obligations. A failure to comply with the SCLS can result in the repayment of back wages, as well as criminal penalties, civil False Claims Act liability, and suspension or debarment.