22.1002-2
Wage determinations based on prevailing rates
Contractors on service contracts over $2,500 without a predecessor’s collective bargaining agreement must pay employees at least the DOL-determined prevailing wage or, if unavailable, the FLSA minimum wage.
Overview
FAR 22.1002-2 requires contractors performing service contracts over $2,500, where no predecessor contractor’s collective bargaining agreement applies, to pay employees at least the prevailing wage and fringe benefits as determined by the Department of Labor (DOL) for the locality. If no DOL wage determination exists for the area, contractors must pay at least the minimum wage established by the Fair Labor Standards Act (FLSA). This ensures that workers on federal service contracts receive fair compensation based on local standards or federal minimums.
Key Rules
- Prevailing Wage Requirement
- Contractors must pay employees at least the prevailing wage and fringe benefits set by the DOL for the contract’s locality.
- Fallback to Minimum Wage
- If no DOL wage determination exists, contractors must pay at least the FLSA minimum wage.
- Applicability Threshold
- Applies to service contracts exceeding $2,500 without a predecessor’s collective bargaining agreement.
Responsibilities
- Contracting Officers: Ensure contracts include the correct wage determination and verify contractor compliance.
- Contractors: Pay employees according to the applicable wage determination or FLSA minimum wage.
- Agencies: Oversee compliance and address wage determination questions with the DOL.
Practical Implications
- This regulation protects workers from underpayment on federal service contracts.
- Contractors must verify the correct wage determination for each locality and contract.
- Failure to comply can result in penalties, back wage payments, or contract termination.