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Government Watchdog: DOL’s Lack of Service Contract Act Enforcement Costs Workers Millions

11.23.20

WASHINGTON – Today, the Government Accountability Office (GAO) released a report revealing lapses in the Department of Labor’s enforcement of the Service Contract Act (SCA), which requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality.  

The GAO found that from 2014 to 2019, the Department of Labor found wage or benefit violations in 68 percent of its SCA cases—resulting in approximately $224 million in back wages for workers. The GAO also found that, during this period, over 600 contractors were awarded federal contracts even after being found to have repeatedly violated the SCA and only 60 contractors were debarred.

The report was requested by Education and Labor Chair Robert C. “Bobby” Scott (VA-03), Workforce Protections Subcommittee Chair Alma Adams (NC-12), and Veterans Affairs Committee Chair Mark Takano (CA-41). 

“The Government Accountability Office’s report confirms what we already knew to be true: Government contractors are rewarded even when they fail to adequately pay their workers. The Wage and Hour Division recovered $224 million in back wages for workers but only 60 of the over 600 contractors who committed violations were debarred,” said Chairman Scott. “I urge the Department of Labor to implement the GAO’s recommendations and improve its enforcement of the Service Contract Act.”

“The GAO’s findings in this report are clear and unsurprising. The Department of Labor’s Wage and Hour Division failed to hold contractors accountable and this dereliction fell on the backs of nearly 130,000 workers – many of whom are frontline service employees experiencing the brunt of our current economic crisis. The report also uncovers concerning lapses on the part of the United States Postal Service which must be rectified,” said Rep. Alma Adams.“Safeguards and protections for workers like those in the Service Contract Act are useless without enforcement. Hopefully these findings prompt the Department of Labor to effectively use the authority entrusted to it by law.”

“The Department of Labor’s failure to enforce the Service Contract Act has led to hundreds of millions in lost wages and benefits for security guards, janitors, and other federal contract workers. A majority of the worst-offending government contractors have not been held accountable for violating the SCA, and that needs to change,” said Rep. Mark Takano. “It is crucial for the Department of Labor to implement the GAO’s recommendations, exercise its authority, and ensure that the Service Contract Act is being enforced to protect workers.”

To read the full report, click here.

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