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Employment Law Alert – COVID-19 and the Service Contract Act

August 21, 2020

In recently issued answers to FAQs, the U.S. Department of Labor (DOL) provided direction to employers with federal government contracts subject to the Service Contract Act (SCA) on the requirements for compliance with the Families First Coronavirus Response Act (FFCRA). The published guidance specifically addressed the wage rates set by the SCA and whether subject employers should pay the health and welfare fringe benefit rate when the employee utilizes leave pursuant to the FFCRA.

If an employee receives health insurance, SCA employers are required to continue this benefit while the employee is on paid leave provided by the FFCRA. The employee should also be paid at their applicable prevailing wage rate for any leave provided under the SCA.

For SCA employers who pay the health and welfare cash equivalent instead of providing fringe benefits, if an employee is only using FFCRA leave, SCA employers are not required to pay the employee the fringe benefit rate in addition to the SCA prevailing wage rate. However, where an employee is using FFCRA leave concurrent with leave provided under the SCA or Executive Order (EO) 13706, an SCA employer is required to provide SCA health and welfare benefits or the monetary equivalent required by the EO.

For more information regarding the required rate of pay under the SCA (or the Davis-Bacon Act applicable to federal construction contracts) and the FFCRA, employers should review the complete answers to FAQs provided by DOL. Please contact us if you have any questions regarding this Alert or would like to discuss this topic further.


The contents of this Alert are for informational purposes only and do not constitute legal advice. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or a member of the Shulman Rogers Employment and Labor Law Group.