Department of Labor (DOL)

The Department of Labor (DOL) is the federal agency responsible for promoting the welfare of wage earners and job seekers, enforcing federal labor laws, and administering programs related to workplace safety, wages, benefits, and employment, including the labor standards laws that directly govern federal contractor wage and benefit obligations.

What is the Department of Labor?

DOL's Wage and Hour Division (WHD) administers and enforces several federal contractor labor standards laws of direct significance to the GovCon community. The Service Contract Act (SCA, 41 U.S.C. § 6701) requires contractors and subcontractors performing services on federal contracts exceeding $2,500 to pay service employees at least the prevailing wages and fringe benefits for the locality and occupation. The Davis-Bacon Act requires contractors on federal construction contracts exceeding $2,000 to pay workers the locally prevailing wages.

The Office of Federal Contract Compliance Programs (OFCCP) within DOL enforces equal employment opportunity and affirmative action obligations on federal contractors and subcontractors. Contractors with 50 or more employees and federal contracts of $50,000 or more must develop written Affirmative Action Programs (AAPs). OFCCP conducts compliance reviews and can debar contractors who fail to meet EEO and AAP requirements.

DOL also administers the Worker Adjustment and Retraining Notification (WARN) Act, which affects contractor workforce transitions at contract end, and enforces the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act, disability and veteran hiring requirements for federal contractors.

Why DOL matters for government contractors

DOL compliance, particularly SCA wage determinations, OFCCP requirements, and WARN Act obligations, represents significant legal and financial risk for federal service contractors. SCA non-compliance can result in contract termination, debarment, and back-wage liability. OFCCP enforcement actions can result in contract suspension pending compliance corrective actions.

Example

A facilities management contractor wins a five-year federal services contract. The contracting officer attaches a DOL Wage Determination for the contract's geographic location, specifying minimum hourly wages and fringe benefits for each labor category under the SCA. The contractor builds these rates into its labor cost structure and updates them each time DOL publishes a revised wage determination for the locality.

Frequently Asked Questions

What is a DOL Wage Determination and where can contractors find them?

A Wage Determination is a DOL document that specifies the minimum wages and fringe benefits required for specific occupations under the Service Contract Act or Davis-Bacon Act in a particular geographic area. Wage Determinations are attached to applicable contracts by the contracting officer and are publicly searchable through SAM.gov's Wage Determinations Online (WDOL) portal.

When does the Service Contract Act apply?

The SCA applies to federal service contracts and subcontracts exceeding $2,500 for services performed in the United States. It covers services such as janitorial, guard, food service, data entry, and technical services, but not construction (covered by Davis-Bacon) or manufacturing (covered by Walsh-Healey). FAR 22.1002 specifies SCA applicability criteria.

What is OFCCP and what triggers a compliance review?

The OFCCP enforces affirmative action and equal employment opportunity requirements for federal contractors. It selects contractors for compliance reviews based on a neutral scheduling system and may also conduct targeted reviews based on discrimination complaints. A compliance review involves analysis of the contractor's AAP, workforce data, and employment practices.

Does DOL itself have contracting opportunities?

Yes. DOL contracts for IT systems, program evaluation, training services, workforce development support, and administrative services. The Mine Safety and Health Administration (MSHA), OSHA, Employment and Training Administration (ETA), and Veterans' Employment and Training Service (VETS) all have contracting programs that fund programmatic support services.