FAR 37.107—Service Contract Labor Standards.
Plain-English Summary
FAR 37.107 is a short but important cross-reference provision that points contracting officers and contractors to the Service Contract Labor Standards statute, 41 U.S.C. chapter 67, when determining whether a service contract is covered. It explains that the statute establishes minimum wages, fringe benefits, and other working conditions for certain service contracts, but it does not itself define coverage in detail. Instead, coverage is determined by the statute’s own definitions and exceptions, together with the implementing regulations. In practice, this section matters because it reminds acquisition personnel that Service Contract Labor Standards applicability is a threshold issue that must be resolved before award and administered correctly throughout performance. If the statute applies, the contract must include the required labor standards terms and the contractor must comply with wage and benefit obligations for covered service employees. If it does not apply, those requirements are not imposed under this statute, but the contracting officer still must make the coverage determination carefully and consistently.
Key Rules
Statutory coverage controls
Whether Service Contract Labor Standards applies depends on the statute’s definitions and exceptions, not on a general assumption that all service contracts are covered. The contracting officer must look to 41 U.S.C. chapter 67 and the implementing regulations to determine coverage for the specific contract.
Minimum wages and fringe benefits
For covered service contracts, the statute provides for minimum wages and fringe benefits for service employees. These labor standards are mandatory when the contract falls within the statute’s scope.
Other working conditions
The statute also addresses other conditions of work for covered service contracts. This means compliance is broader than pay alone and may affect how the contractor structures labor performance.
Coverage must be determined case by case
The section makes clear that applicability is not automatic; it must be evaluated for each service contract based on the contract’s facts and the governing legal criteria. This prevents over- or under-application of labor standards.
Implementing regulations matter
The FAR and other implementing regulations are part of the coverage analysis. Contracting officers and contractors must use those regulations together with the statute to determine whether the labor standards apply.
Responsibilities
Contracting Officer
Determine whether the Service Contract Labor Standards statute applies to the specific service contract by applying the statute’s definitions, exceptions, and implementing regulations. If coverage exists, ensure the contract includes the required labor standards provisions and that the solicitation and award documents reflect the applicable wage and fringe benefit requirements.
Contractor
Review the solicitation and contract to identify whether Service Contract Labor Standards applies and, if so, comply with the required minimum wages, fringe benefits, and other covered working conditions for service employees. The contractor must also account for these requirements in pricing, staffing, and performance planning.
Agency
Support accurate acquisition planning and contract administration so that labor standards coverage is identified correctly and consistently. Agencies must ensure their acquisition personnel use the proper statutory and regulatory framework when evaluating service contracts.
Practical Implications
This section is mainly a reminder to make a correct coverage determination before award; missing that step can lead to an improperly priced contract or missing labor clauses.
A common pitfall is assuming every service contract is covered. The actual test is whether the contract fits the statute and regulations, including any exceptions.
If the statute applies, wage and fringe benefit obligations can materially affect bid pricing and subcontractor management, so contractors should evaluate labor costs early.
Contracting officers should document the coverage analysis carefully, because later disputes often turn on whether the contract was properly classified as subject to Service Contract Labor Standards.
Even though FAR 37.107 is brief, it has significant downstream effects on solicitation terms, contract administration, and compliance risk.
Official Regulatory Text
41 U.S.C. chapter 67 , Service Contract Labor Standards, provides for minimum wages and fringe benefits as well as other conditions of work under certain types of service contracts. Whether or not the Service Contract Labor Standards statute applies to a specific service contract will be determined by the definitions and exceptions given in the Service Contract Labor Standards statute, or implementing regulations.