Labor Standards for Federal Service Contracts
OMB Control Number: 1235-0007
OMB Expiration Date: 12/31/2025
SUPPORTING STATEMENT FOR
LABOR STANDARDS FOR FEDERAL SERVICE
CONTRACTS
OMB CONTROL NO. 1235-0007
The U.S. Department of Labor (Department) submits this information collection request (ICR) as an extension without change of a currently approved collection.
The Wage and Hour Division (WHD) administers the McNamara-O’Hara Service Contract Act (SCA), 41 U.S.C. 6703 et seq. The SCA applies to every contract entered into by the United States or the District of Columbia, the principal purpose of which is to furnish services to the United States through the use of service employees. The SCA requires contractors and subcontractors performing services on covered federal or District of Columbia contracts in excess of $2,500 to pay service employees in various classes no less than the monetary wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor’s collective bargaining agreement. Safety and health standards also apply to such contracts. WHD enforces the compensation requirements of the SCA.
Section 2(a) of the SCA provides that every contract subject to the Act must contain a provision specifying the minimum monetary wages and fringe benefits to be paid to the various classes of service employees performing work on the contract. Many wage determinations issued for recurring services performed at the same federal facility provide for certain vested fringe benefits (e.g., vacations), which are based on the employee’s total length of service with a contractor or any predecessor contractor. See 29 CFR 4.162. When found to prevail, such fringe benefits are incorporated in wage determinations and are usually stated as “one-week paid vacation after one year's service with a contractor or successor, two weeks after two years”, etc. These provisions ensure that employees receive the vacation benefit payments that they have earned and accrued by requiring that such payments be made by successor contractors that hire the same employees who have worked over the years at the same facility in the same locality for predecessor contractors.
However, WHD enforcement experience has revealed that a number of service contractors have had difficulty in obtaining length of service data for those employees who have been employed by predecessor contractors, and they are reluctant to rely on any information provided by individual employees. Contractors need to know what their vacation payment liability is, based on accurate information, early in the contract period. Contractors that may unintentionally fail to meet their vacation pay obligations because of a lack of timely and accurate information could be held liable for large back wage payments, which could lead to debarment from bidding on future contracts. See 29 CFR 4.188. In addition, efficient transmittal of such information will save the costs of protracted labor standards investigations and disputes. A number of service contractors have informed WHD that obtaining accurate information from a predecessor contractor would contribute to greater voluntary compliance with the vacation fringe benefit provision by successor contractors. To ensure that proper vacation benefits are paid to service employees and that contractors have reasonably accurate information available to them on which to determine fringe benefit liability, 29 CFR 4.6(l)(2) and 4.173 provide for the transfer of a list of the anniversary dates of employment of service employees from incumbent contractors to successor contractors through the contracting agency.
Section 2(a) of the SCA provides that every contract subject to the Act must contain a provision specifying the minimum monetary wage and fringe benefits to be paid the various classes of service employees employed on the contract work. See 41 U.S.C. 6703, et seq. Problems sometimes arise when employees are working on service contracts in job classifications that the Department was not previously informed about and when there are job classifications for which no wage data are available.
29 CFR 4.6(b)(2) provides a process for “conforming” (i.e., adding) classifications and wage rates to wage determinations for classes of service employees not previously listed on a wage determination, but where employees are actually working on an SCA covered contract. This process ensures that the requirements of section 2(a) of the Act are fulfilled and that a formal record exists as part of the contract which documents the wage rate and fringe benefits to be paid for a conformed classification while a service employee(s) is employed on the contract.
The contracting officer is required to review each contractor-proposed conformance to determine if the unlisted classes have been properly classified by the contractor so as to provide a reasonable relationship (i.e., appropriate level of skill comparison) between such unlisted classifications and the classifications and wages listed in the wage determination. See 29 CFR 4.6(b)(2). The contractor burden is addressed in item 12 and covers the contractor and any employees of the contractor who are included in burden. Moreover, the contracting agency is required to forward the conformance action to WHD for review and approval. Id.
In any case where a contract succeeds a contract under which a class was previously conformed, the contractor may use an optional procedure known as indexing (i.e., adjusting) to determine a new wage rate for a previously conformed class. See 29 CFR 4.6(b)(2)(iv)(B). This procedure does not require Department approval but requires the contractor to notify the contracting agency in writing that a previously conformed class has been indexed and to include information describing how the new rate was computed. Id.
Sections 2(a) and 4(c) of the SCA provide that any contractor that succeeds a contract subject to the Act and under which substantially the same services are furnished shall pay any service workers employed on the contract no less than the wages and fringe benefits to which such workers would have been entitled if employed under the predecessor contract. See 29 CFR 4.163(a). 29 CFR 4.6(l)(1) requires a predecessor contractor to provide to the contracting officer a copy of any CBA governing the wages and fringe benefits paid to service employees performing work on the contract during the contract period. The contracting agency submits these CBAs to WHD where they are used in issuing wage determinations for successor contracts subject to sections 2(a) and 4(c) of SCA. See 29 CFR 4.4(c).
Successor contractors use the information submitted to determine vacation fringe benefit entitlements earned and accrued by service employees who were employed by predecessor contractors and have continued on with the successor contractor. Failure to collect this information would result in the difficulties outlined in item 1A above.
WHD staff review conformance actions to determine the appropriateness of the conformance and to determine whether the contractor has complied with the requirements of the SCA. This review is necessary to ensure that employees are properly classified and compensated.
Successor contracts can update previous conformances through indexing instead of submitting a new conformance. The contracting agency may review the indexed conformance to ensure that the minimum wage rate of the new contract is correct.
In general, the contracting agency submits CBAs to WHD for use in the issuance of wage determinations for successor contracts subject to sections 2(a) and 4(c) of SCA. However, due to the creation of the System for Award Management (SAM.gov), contracting agencies now have the option to independently create CBA wage determinations online for incorporation into federal service contracts without prior DOL approval or issuance. If the contracting agency chooses to have the Department issue the CBA wage determination, then the appropriate CBAs must be submitted to WHD. Without submission of these CBAs, WHD would be unable to provide contractors with the wage rates and fringe benefits required by law to be paid to service employees performing work on the contract.
The vacation benefit seniority list and the record of conformance may be submitted in any format. Per the Government Paperwork Elimination Act, paper or electronic copies of CBAs and other relevant information is acceptable. The Department uses SAM.gov, which allows contracting agencies to independently create CBA wage determinations online for incorporation into federal service contracts without prior Department approval.
This information collection duplicates no other known WHD requirements. Basic records required to be kept contained in 29 CFR 4.6(g)(1)(i) through (iv) have been previously approved under Fair Labor Standards Act recordkeeping requirements through OMB 1235-0018. This information collection contains four requirements that were not cleared under OMB 1235-0018 and are not available from any other source: 1) vacation benefit seniority lists; 2) conformance record reports; 3) indexed conformances; and 4) collective bargaining agreements.
This information collection does not have a significant economic impact on a substantial number of small entities. The vacation benefit seniority list and the CBA are documents that an employer would maintain to determine liabilities to employees even if this information were not required by 29 CFR part 4. The information in the conformance action report is the minimum necessary to determine whether the contractor has conformed wage rates and fringe benefits in accordance with the requirements of the SCA and its regulations.
The seniority list must be transmitted through the contracting agency to the successor contractor at the end of the predecessor's contract, usually annually, if it is to achieve its purpose. CBAs are submitted once during the contract period, unless subsequently amended CBAs can also be submitted through indexing, in which successor contracts can update previous conformances instead of submitting a new conformance. The record of conformance actions must be submitted to the contracting agency within 30 days of the initial performance on the contract of the class of workers not listed on the wage determination to ensure that the provisions of section 2(a) of the SCA are satisfied (see Item 1B above). Less frequent submission of the seniority list, CBA, or record of conformance action is not feasible.
requiring respondents to report information to the agency more often than quarterly;
requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it;
requiring respondents to submit more than an original and two copies of any document;
requiring respondents to retain records, other than health, medical, government contract, grant-in-aid, or tax records for more than three years;
in connection with a statistical survey, that is not designed to produce valid and reliable results that can be generalized to the universe of study;
requiring the use of statistical data classification that has not been reviewed and approved by OMB;
that includes a pledge of confidentiality that is not supported by authority established in statute or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use; or
requiring respondents to submit proprietary trade secrets, or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information's confidentially to the extent permitted by law.
There are no special circumstances associated with this information collection.
Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.
Consultation with representatives of those from whom information is to be obtained or those who must compile records should occur at least once every 3 years -- even if the collection-of-information activity is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.
On August 7, 2025, the Department published a notice in the Federal Register inviting public comment about this information collection (90 FR 38185). No comments were received.
The Department makes no payments or gifts to respondents completing these recordkeeping requirements.
The Department makes no assurances of confidentiality to respondents. As a practical matter, the Department would only disclose information collected under this request in accordance with the provisions of the Freedom of Information Act, 5 U.S.C. 552, and the attendant regulations, 29 CFR part 70, and the Privacy Act, 5 U.S.C. 552a with its attendant regulations, 29 CFR part 71.
The Department does not request sensitive information in this information collection.
Indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated. Unless directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden estimates. Consultation with a sample (fewer than 10) of potential respondents is desirable. If the hour burden on respondents is expected to vary widely because of differences in activity, size, or complexity, show the range of estimated hour burden, and explain the reasons for the variance. Generally, estimates should not include burden hours for customary and usual business practices.
If this request for approval covers more than one form, provide separate hour burden estimates for each form and aggregate the hour burdens.
Provide estimates of annualized cost to respondents for the hour burdens for collections of information, identifying and using appropriate wage rate categories. The cost of contracting out or paying outside parties for information collection activities should not be included here. Instead, this cost should be included under ‘Annual Cost to Federal Government’.
Virtually all SCA covered contracts contain wage determinations providing vacation requirements that apply to successor contracts. However, about one-half are multi-year contracts (generally three years), where the contractor succeeds itself in two of the three years and would only need to submit the vacation list in the third year. Using data from USAspending.gov, the Department estimates that 191,084 federal government contract actions were subject to the SCA during FY 2024.1
95,542 one-year contracts + 31,847 estimated contracts in the third year = 127,389 contractors would submit a vacation benefit seniority list each year.
Based on the ready availability of payroll and employment records, an estimate of one hour per response has been made for this requirement. The only variation would be the size of the contractor's work force and large contractors would submit a larger list of employees.
Annual burden: 127,389 contractors × 1 response × 1 hour = 127,389 hours.
The Department received 141 contracts that required conformance in FY 2024. The annual burden is 30 minutes per contract to assemble and transmit the conformance record to the contracting agency for a total annual burden of 71 hours (rounded). These estimates are based on workload in processing conformance actions. This burden estimate includes burden to the contractor and any employees of the contractor. For burden to the contracting agency, if any, see federal costs in Item 14.
Annual burden: 141 contracts × 1 response × 30 minutes ÷ 60 minutes = 71 hours (rounded).2
As noted earlier, in a case where a contract succeeds a contract under which a class was previously conformed, the contractor may use a procedure known as indexing to determine a new wage rate for a previously conformed class. This procedure does not require Department approval but requires the contractor to notify the contracting agency in writing that the previously conformed class has been indexed and to include information describing how the new rate was computed.
The Department estimates that 20% of the annual conformed contracts are subject to indexing.
141 contracts × 20% = 28 contracts (rounded).
Due to the dynamic changing rates and mathematical computations, approximately two hours of time is required to complete the indexing procedure and notify the contracting agency in writing.
Annual burden: 28 contracts × 1 response × 2 hours = 56 hours.
In FY 2024, contracting agencies received 1,090 CBAs annually. Based on workload, the transmitting of each CBA by the contractor to the contracting agency takes approximately five minutes, for a total annual burden of approximately 83 hours (rounded).
Annual burden: 1,090 CBAs × 1 response × 5 minutes ÷ 60 minutes = 91 hours (rounded).
Total Annual Burden Hours: 127,389 + 71 + 56 + 91 = 127,607 hours.
Without specific wage data regarding respondents, the Department used the average hourly earnings of production or nonsupervisory employees in private, service-providing industries, which was $31.29 in September 2025, to estimate respondent costs.3 In addition, the Department estimates an additional benefits cost of 42%4 and an overhead cost of 17% of average hourly earnings.
$31.29 × 42% = $13.14
$31.29 × 17% = $5.32
Total Hourly Wage Rate: $31.29 + $13.14 + $5.32 = $49.75
DOL estimates total annual respondent costs for the value of their time to be $6,348,448.25 (127,607 hours × $49.75)
Activity |
No. of Respondents |
No. of Responses per Respondent |
Total Responses |
Average Burden (Hours) |
Total Burden (Hours) |
Hourly Wage Rate |
Total Burden Cost |
Vacation Benefit Seniority List |
127,389 |
1 |
127,389 |
1 hour |
127,389 hours |
$49.75 |
$6,337,602.75 |
Conformance Record |
141 |
1 |
141 |
.5 hour |
71 hours |
$49.75 |
$3,532.25 |
Indexing Costs |
28 |
1 |
28 |
2 |
56 hours |
$49.75 |
$2,786.00 |
Collective Bargaining Agreements |
1,090 |
1 |
1,090 |
.0833 hours |
91 hours |
$49.75 |
$4,527.25 |
TOTAL |
128,648 |
1 |
128,648 |
|
127,607 |
$49.75 |
$6,348,448.25 |
The cost estimate should be split into two components: (a) a total capital and start up cost component (annualized over its expected useful life); and (b) a total operation and maintenance and purchase of services component. The estimates should take into account costs associated with generating, maintaining, and disclosing or providing the information. Include descriptions of methods used to estimate major cost factors including system and technology acquisition, expected useful life of capital equipment, the discount rate(s), and the time period over which costs will be incurred. Capital and start-up costs include, among other items, preparations for collecting information such as purchasing computers and software; monitoring, sampling, drilling and testing equipment; and record storage facilities.
If cost estimates are expected to vary widely, agencies should present ranges of cost burdens and explain the reasons for the variance. The cost of purchasing or contracting out information collections services should be a part of this cost burden estimate. In developing cost burden estimates, agencies may consult with a sample of respondents (fewer than 10), utilize the 60-day pre-OMB submission public comment process and use existing economic or regulatory impact analysis associated with the rulemaking containing the information collection, as appropriate.
Generally, estimates should not include purchases of equipment or services, or portions thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with requirements not associated with the information collection, (3) for reasons other than to provide information or keep records for the government, or (4) as part of customary and usual business or private practices.
The Department associates no capital, start-up, operation, or maintenance costs with this information collection. Respondents directly provide copies of vacation benefit seniority lists, conformance records, indexed conformance records, and CBAs to the contracting agency for appropriate action.
There are no estimated annualized costs to the federal government, as vacation benefit lists, conformance records, indexed conformance records, and collective bargaining agreements are all transmitted electronically.
Changes reported on the burden worksheet do not result from changes to the regulations; they result because updated data has been used, resulting in adjustments to the burden worksheet.
The data used to calculate the benefits cost portion of a respondent’s hourly rate has been updated to use the ECEC data for private industry workers instead of civilian workers, resulting in benefits decrease from 45% to 42%.
However, the overall burden has increased, because compared to 2022, when the Department last extended this paperwork package, there are increased contracts, and a greater number of conformances, indexed conformances, and collective bargaining agreements, which, coupled with wage increases, resulted in greater costs.
The Department does not plan to publish the results of this information collection.
The Department does not seek an exception to the requirement to display the expiration date on this information collection.
The Department is not requesting an exception to any of the certification requirements for this information collection.
This information collection does not employ statistical methods.
1 USAspending is the official source of spending data for the U.S. Government. The contract award data made available on USAspending was retrieved from the Federal Procurement Data System Next Generation (FPDS-NG), which is the system of record for federal procurements.
2 When needed, all numbers in this supporting statement are rounded to the nearest whole number or dollar amount.
3 The Employment Situation, September 2025, Table B-8, U.S. Department of Labor, Bureau of Labor Statistics, (https://www.bls.gov/news.release/archives/empsit_11202025.pdf).
4 Employer Costs for Employee Compensation, September 2024-June 2025, Table 1, quarterly total benefit private industry average, U.S. Department of Labor, Bureau of Labor Statistics (https://www.bls.gov/bls/news-release/ecec.htm#current)
| File Type | application/vnd.openxmlformats-officedocument.wordprocessingml.document |
| Author | Amy Hunter |
| File Modified | 0000-00-00 |
| File Created | 2026-02-07 |