What is the Service Contract Act?

Why should I join a Union?

In today's political and economic climate, now more than ever workers need to join together and form unions. As the profit motive of corporations become stronger and stronger, many good loyal workers are beginning to suffer and only through working as a group and forming a union can the situation be remedied.

The IAM has a long history of representing workers who are employed by Federal Government contractors. Whether you work for a large corporation like Boeing or a small start-up aerospace contractor, throughout our history we have been able to work with and have a good working relationship with most of our member's employers.

However, once in a while some of those contractors and companies, for what ever reason, did not act in good faith to help resolve issues with the IAM or if they failed to live up to negotiated wages, benefits or working conditions we have and will act swiftly to take the proper steps to remedy the situation through our contracted grievance procedure and through the full force of the over 500,000 active Machinist Union members.

SERVICE CONTRACT ACT: BASIC QUESTIONS AND ANSWERS

Q: What is the Service Contract Act?

A: The McNamara-O'Hara Service Contract Act of 1965, as amended, provides labor standards for certain persons employed by Federal Contractors to furnish services to Federal agencies.

Q: How are wages determined under the Service Contract Act?

A: For UNREPRESENTED employees, Minimum Wage Rates are determined by the US Department of Labor by doing periodic wage surveys in the locality in which the Service Contract employees work. Then, they issue a document which is called the "Wage Determination." For REPRESENTED employees who engage in collective bargaining, the wages and benefits negotiated as a result of "arms length negotiations" replace and serve as the minimum prevailing wage for that particular service contract.

Q: How are fringe benefits determined under the Service Contract Act?

A: For UNREPRESENTED employees, the same wage determination lists minimum fringe benefits. The Dept. of Labor has established a rate of $3.50 per hour. But, for REPRESENTED employees, fringe benefits negotiated as a result of "arms length negotiations" become the minimum fringe benefits for that particular Service Contract. These fringe benefits often exceed $4.00 per hour.

Q: What happens when a new Service Contractor takes over the Service Contract on which I am working?

A: Under the Service Contract Act, a new Service Contractor is not required to hire any of the existing Service Contract employees. For UNREPRESENTED employees, the new Service Contractor who has won the bid away from the current Service Contractor, only has the obligation to pay the minimum rates established by the Department of Labor's wage determination. And, they can work with less people, for less hours, lower classifications! Remember, the contract is many times 'let to the lowest bidder.' For REPRESENTED employees, section 4C of the Service Contract Act, provides that no contractor who succeeds a previous Contractor, will pay any service employee under such contract less than the wages and fringe benefits (including accrued wages and fringe benefits) provided for in the collective bargaining agreement. Normally, when a service contract is being re-bid, the competing Contractors will contact the Union representative and attempt to reach an agreement on the conversion and indicate so in their bid insuring that labor peace prevails. With a skilled workforce like yours, virtually all Contractors will agree to honor the terms and conditions of the collective bargaining agreement.

Q: Will my employer suffer a loss in profits if they pay more than the Department of Labor's wage determinated rates in my Collective Bargaining Agreement?

A: When your employer pays UNREPRESENTED employees wages and benefits which are higher than provided for in the Department of Labor's wage determination, those increases will affect profits. However, wages and benefits negotiated for REPRESENTED employees are passed through to the customer, usually the federal government, once a year: normally this is effective October 1, of each year.

Q: Well, isn't this gouging the Government?

A: NO! The are two reasons why; first if the negotiated wages and benefits are at valiance the USAF can challenge. The second reason is Government believes 'Collective bargaining at arms length' is the very best way to determine wages and benefits. The Government has confidence that private sector contractors and their employees who engage in collective bargaining will reach the very best rate. That's why the Service Contract Act recognizes and honors rates and benefits negotiated at 'arms length' through collective bargaining. The U.S. Government knows that the Service Contract Act has saved billions of dollars for tax payers and still delivers quality services to the customer.

Q: How can I get good strong Machinists Union Representation?

A: The first step in gaining Machinists union representation is to contact the District 725 Organizing Department today and speak with an organizer about the particulars of your situation.