FAR 52.222-42—Statement of Equivalent Rates for Federal Hires.
Plain-English Summary
FAR 52.222-42, Statement of Equivalent Rates for Federal Hires, is an informational clause used in Service Contract Labor Standards (SCLS) contracts to show the wage and fringe benefit rates that would apply if the listed service employees were hired by the contracting agency under the federal wage systems in 5 U.S.C. 5341 or 5 U.S.C. 332. The clause identifies the classes of service employees expected to work under the contract and provides a comparison point between contractor labor rates and equivalent federal rates. It exists to promote transparency and help offerors, contractors, and agency personnel understand the government’s view of comparable federal compensation for the same kinds of work. In practice, it is not a wage determination, does not set the contractor’s required wages, and does not replace the Department of Labor’s wage determination under the SCLS statute and 29 CFR part 4. Its main significance is informational: it helps frame labor pricing, contract administration, and market comparison, while avoiding confusion about what rates are legally binding.
Key Rules
Informational only
The clause expressly states that the listed rates are for information only. They do not establish the contractor’s required wages or fringe benefits and do not function as a wage determination.
Applies to SCLS contracts
This clause is used in contracts subject to the Service Contract Labor Standards statute and the Secretary of Labor’s regulations at 29 CFR part 4. It is part of the labor standards framework for covered service contracts.
Lists expected employee classes
The clause must identify the classes of service employees expected to be employed under the contract. The listed classes should reflect the labor categories anticipated for performance.
Shows equivalent federal pay
For each listed class, the clause states the wages and fringe benefits that would be payable if those employees were hired by the contracting agency under the federal wage systems referenced in 5 U.S.C. 5341 or 5 U.S.C. 332.
Not a substitute for wage determinations
The clause does not replace the applicable Department of Labor wage determination. Contractors must still comply with the actual SCLS wage determination and any other applicable labor requirements.
Inserted when prescribed
The clause is included when required by FAR 22.1006(b). Contracting officers should use it only in the circumstances specified by the FAR prescription.
Responsibilities
Contracting Officer
Insert the clause when prescribed by FAR 22.1006(b) and ensure the employee classes and equivalent rates are completed accurately based on the agency’s intended labor categories and federal pay comparison.
Agency
Provide or support the identification of the service employee classes and the equivalent federal wage and fringe benefit information used in the clause, and ensure the information reflects the agency’s intended comparison.
Contractor
Review the clause as informational context during pricing and performance planning, but rely on the applicable wage determination and contract terms—not this clause—for actual wage and fringe benefit obligations.
Offerors
Use the statement as a pricing reference when preparing proposals, while recognizing that it does not set required compensation and does not override SCLS requirements.
Department of Labor
Issue and administer the applicable wage determinations and labor standards rules under the Service Contract Labor Standards statute and 29 CFR part 4; the clause itself does not perform that function.
Practical Implications
This clause can help explain why the government may view certain service labor as comparable to federal positions, which can affect pricing expectations and labor mix discussions.
A common pitfall is treating the listed rates as mandatory contractor pay rates; they are not. The binding compensation requirements come from the wage determination and other contract clauses.
Another risk is inaccurate labor-category mapping. If the employee classes listed in the clause do not match the actual work, the comparison value is reduced and may confuse pricing or administration.
Contracting officers should make sure the clause is used only as prescribed and that it does not conflict with or distract from the actual SCLS wage determination.
Contractors should keep the clause in perspective during proposal preparation: it is useful background information, but compliance decisions should be based on the contract’s labor standards clauses and the Department of Labor wage determination.
Official Regulatory Text
As prescribed in 22.1006 (b) , insert the following clause: Statement of Equivalent Rates for Federal Hires (May 2014) In compliance with the Service Contract Labor Standards statute and the regulations of the Secretary of Labor ( 29 CFR Part 4 ), this clause identifies the classes of service employees expected to be employed under the contract and states the wages and fringe benefits payable to each if they were employed by the contracting agency subject to the provisions of 5 U.S.C.5341 or 5 332. This Statement is for Information Only: It is not a Wage Determination Employee Class Monetary Wage-Fringe Benefits _____________ ____________________________ _____________ ____________________________ _____________ ____________________________ _____________ ____________________________ _____________ ____________________________ _____________ ____________________________ _____________ ____________________________ (End of clause)