FAR 22.1002-1—General.
Plain-English Summary
FAR 22.1002-1 states the basic coverage for service contracts subject to the Service Contract Labor Standards (SCLS), formerly the Service Contract Act. It explains that service contracts over $2,500 must include mandatory provisions addressing minimum wages, fringe benefits, safe and sanitary working conditions, notice to employees of the minimum allowable compensation, and the use of equivalent Federal employee classifications and wage rates. The section also ties service contract duration to 41 U.S.C. 6707(d), which limits service contracts to no more than 5 years. In practice, this section tells contracting officers when SCLS requirements must be built into the solicitation and contract, and it alerts contractors that labor pricing, wage determinations, and workplace compliance are not optional add-ons but core contract requirements. It matters because failure to include or follow these provisions can lead to wage underpayments, contract administration problems, and legal or enforcement issues.
Key Rules
Coverage threshold
Service contracts over $2,500 are subject to the mandatory labor provisions described in this section. Below that threshold, these specific SCLS requirements do not apply under this provision.
Minimum wages and fringe benefits
Covered service contracts must include provisions requiring payment of at least the applicable minimum wages and fringe benefits. The contract must reflect the wage determination or other required labor standards applicable to the work.
Safe working conditions
The contract must include requirements for safe and sanitary working conditions. This means the contractor must maintain a workplace that meets the applicable labor standards and health and safety expectations tied to the contract.
Employee notice
Employees must be notified of the minimum allowable compensation. The contract must therefore include the required notice provisions so workers know the wage and fringe benefit floor that applies to their work.
Equivalent classifications and rates
The contract must address equivalent Federal employee classifications and wage rates. This helps align service contract labor categories with the proper wage determination structure and prevents misclassification of covered work.
Five-year limit
Under 41 U.S.C. 6707(d), service contracts may not exceed 5 years. Contracting officers must structure the contract term accordingly and avoid awarding or extending a service contract beyond the statutory maximum.
Responsibilities
Contracting Officer
Determine whether the contract is a covered service contract over $2,500, incorporate the required SCLS provisions, ensure the correct wage determination and labor clauses are included, and structure the contract term so it does not exceed the 5-year statutory limit.
Contractor
Comply with the contract’s wage, fringe benefit, notice, and workplace safety requirements; pay covered employees at least the required minimum compensation; and maintain records and practices consistent with the incorporated labor standards.
Agency
Support acquisition planning and administration so covered service contracts include the required labor provisions and are not written for a term longer than allowed by statute.
Employees
Receive the required notice of minimum allowable compensation and work under the wage, fringe benefit, and safe working condition protections required by the contract.
Practical Implications
Contracting officers must identify SCLS coverage early, because the required clauses and wage determinations affect pricing, competition, and award documentation.
A common pitfall is forgetting that the $2,500 threshold triggers mandatory labor provisions; leaving them out can create compliance and payment disputes.
Another frequent issue is misclassifying labor categories or using the wrong wage determination, which can lead to underpayment and contract administration problems.
Contractors should treat fringe benefits and wage rates as binding cost elements, not optional benefits, and verify that payroll systems can support the required rates before performance starts.
The 5-year maximum term requires careful planning for options, extensions, and follow-on acquisitions so the contract does not run past the statutory limit.
Official Regulatory Text
Service contracts over $2,500 shall contain mandatory provisions regarding minimum wages and fringe benefits, safe and sanitary working conditions, notification to employees of the minimum allowable compensation, and equivalent Federal employee classifications and wage rates. Under 41 U.S.C. 6707(d) , service contracts may not exceed 5 years.