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The Services Contract Act of 1965, The Davis Bacon Act and the Walsh Healey Act are wage laws in the US. These laws were designed to protect employees from exploitative employers. The laws strictly stipulate the specific terms and conditions within which workers would be hired and paid.
At the time, companies were using unorthodox methods of hiring that led to exploitation and abuse of worker’s rights. The laws prohibit and restrict the existing employers whether government contractors, private companies or any venture that utilizes human labor from hiring workers on wages below the minimum requirements.
These acts emphasized that whatever kind payment to be made must be based on the given hourly, daily or monthly minimum wage. These legislations have been effected as per each specifications and field of application. Some of the laws have, however, been amended to suit the changing times. To have a better understanding of the laws, an analysis of each act has been conducted.
The Davis-Bacon Act
This law protects workers from public contractors. Independent corporations, organizations or companies bid most of the designed public work projects and initiatives of the federal government. Once the bid has is accepted and approved, the private company has the mandate to execute the required task without external monitoring or interference. To outmaneuver competitors in order to become the successful bidder, it was observed that private companies used the underbidding tact.
The underbidding mostly involved lowering the respective employees’ wages. (Fulton, 1978) This created and resulted in an inequitable situation which is highly despised in a democratic country where all are equal under the law. The Davis Bacon Act governs contracts exceeding two thousand dollars and was approved in 1931.
The bill had been sponsored and forwarded by Representative Bacon and Senator Davis hence the name Davis Bacon Act. A scenario arose in New York that is said to have fueled the quick adoption by Congress.
It involved Alabama workers in New York. The workers from Alabama had been deployed and hired in the building of a hospital in New York. Since Alabama wages were lower than those in New York, the company that won the bid negotiated and paid the workers from Alabama low wages, yet they were working in New York. They should have been paid using New York’s wage laws.
The Davis- Bacon act, therefore, clearly stipulated that employees must be paid the prevailing wages of the area at the given time irrespective of their place of origin, gender or race. In other words, employees were to be paid the average wage as expected in the area of work for same job executed. This law corrected the wrongs committed to the Alabama workers and ensured other workers from other states would not have their rights abused.
The Walsh- Healey Act
Perkins, the Secretary of Labor, proposed this law but was sponsored in Congress by Walsh and Healey, both Democratic Senator and Representative respectively. (Sickle, 1952) The act was mainly to apply on government contractors supplying the government goods and services worth more than ten thousand dollars.
The act was signed in 1936 a period heavily affected by the effects of the Great Depression. During this time, millions of Americans were unemployed just like when the Davis-Bacon Act was signed. To ensure there was equity and creation of job, it was required that the supplier be a regular dealer in supplies but manufacturers were preferred to avoid bid brokering where companies would buy goods and then sell them to the federal government at an inflated rate.
Employers were also required to pay the employees not less than what had been clearly stipulated as the minimum wage by the Secretary of Labor. The wage must be consistent with what other persons, employed on similar designated work or working in similar companies as the one in question or in the same area or locality as where the supplies were made or furnished, and the wage passes as the minimum wage.
The Act also put restriction to the number of hours an employee was required to work in a bid to harmonize the working conditions of workers and deter employers from overworking the employees. Eight hours a day or forty hours a week was unanimously agreed as the standard time frame. If a company was to conduct any activity beyond the eight hours, then it had to employ more workers.
This was an initiative at creating employment for the thousands unemployed Americans at the time. In an attempt to further restrict companies from looking for unconventional and cheap labor, the Act put forward that for boys to qualify for employment they must be sixteen years and above, while girls be eighteen years and above. Prisoners were prohibited as a labor force for companies. Workers were to also to be provided with humane working conditions and no work was to be conducted under hazardous or unsanitary environment.
The Services Contract of 1965
The Services Contract also generally referred as The McNamara-O’Hara Service Contract Act (SCA) requires that all contracts that are agreed upon in the United States must meet certain set standards. (Matsushima, 1980).
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The criteria used applies to those that the sole aim is to furnish services using employees generally regarded as service employees and the act applies to each and every contract signed by a company. Contractors and sub contractors are to pay the different categories of employees in their firms not less than the minimum monetary wage rates.
This is provided the contracts for services are more than two thousand five hundred dollars. Wages and increments shall be negotiated and agreed upon but not at any given time shall they be below the minimum wage requirement. Workers were to receive payment for any work done in overtime consistent with the prevailing minimum wage requirements and compensation for any loss incurred while at the company was to be made.
The Services Contract Act of 1965, The Davis Bacon Act and the Walsh Healey Act all highlight and advocate for the plight of workers. Corporations and companies are supposed to ensure the payment of workers is standardized and no company is to pay below the stated minimum wage. The prevailing wage paid to workers is the major issue addressed by these acts. The acts were formulated at a time workers were being exploited by companies. Companies were underbidding at the expense of employees’ payment.
The acts, as clearly stated, wanted a working class who benefit from the work done. This means workers were supposed to support themselves and lead better lives because of better payment.
These acts harmonized salaries and working conditions and in the process eliminated the use of race as factor in payment. The private companies are regulated by these acts, as they are to observe the provisions irrespective of the affiliation of the company. Private companies had misused the freedom they enjoyed which prevented government from interfering with their operations.
The acts were meant to reduce exploitation of workers and by the private sector and give government the means to check exploitation. Additionally, he acts promoted job creation as workers were discouraged from working extra hours without pay. Companies were forced to employ new workers to cater for the increased labor demands instead of paying overtime for the already exhausted workers, whose productivity is low compared to fresh workers.
The rights of individuals to information are also emphasized. Workers who sign contracts are required to have informed consent. This ensures the contracts signed between workers and contractors are mutual, non-exploitative and clearly explained. The working conditions of workers have also been emphasized. No hazardous engagements to the workers are allowed and all the working conditions must pass as hospitable for work.
Companies are required to ensure good working conditions, the right equipment for a given task are supplied and workers are not exposed to risks and dangerous conditions. Discrimination has also been discouraged, with workers earning what they have worked for irrespective of other external subjective factors like place of origin, race and gender. The laws were to apply to all the contractors in the US and employees respectively. Those that violated the acts faced heavy fines or liquidation.
The Davis-Bacon Act regulates contracts exceeding two thousand dollars, the Service Act Contract apply to contracts exceeding two thousand five hundred dollars while the Walsh Healey Act is for contracts exceeding ten thousand dollars. The difference in the stipulated amount brings a wide variation in the application of the acts.
One or two acts might apply to one case but not to the other act. It thus becomes hard to apply all the acts in one case, as the amount in the contract becomes the determining factor. The Davis- Bacon Act mainly focused on the workers, the Walsh-Healey Act focused on workers and preventing the federal government from being exploited by companies while the Service Contract Act was mainly concerned with the service delivery.
While the Davis- Bacon Act and the Services Act mainly dwell on the individual employees, the Walsh- Healey Act emphasizes both the need to avoid exploitation of the employees, the federal government and the nature of company contracted. The Walsh-Healey Act mainly dwells on the need for devising ways of eliminating bid- brokering to avoid losing money by the federal government.
The Services Act mainly focuses on the service offered compared to the wage paid while the other two focuses on the standard wage paid irrespective of quality of the work done. The Service Contract further emphasizes the need for division of labor in the creation of class-categorized workers while the other two apply to all workers.
While the Walsh- Healey Act does not accommodate overtime payment and prohibit working in overtime, the other two create criteria to be adhered to in the payment of extra hours. The Walsh- Healey and Davis- Bacon Acts were sponsored by politicians and had no formal backing while the Service Contract was mainly based on the standards set by the United States Department of Labor.
The Davis-Bacon Act only addresses the issue of the wage harmonization and emphasizes on regulating the companies’ wage payment policies. However, apart from addressing these issues, the other two acts address the issue of the working conditions.
The other big contrast in all three acts is the fact that all they were enacted at different times to cater for the circumstantial difficulties of the time. The Walsh-Healey Act was enacted in 1936, the Davis- Bacon Act in 1931 and the Service Contact Act in 1965.
There were different prevailing issues at the time, different from the other; like the effects of the Great Depression, unemployment, racism and so on. However, the Davis-Bacon act was mainly advocating for equality in a given specific place for all even those from other parts of the US. This means the acts accommodated the different minimum wage requirements of different states and was not in effort to harmonize them throughout the US.
The different acts have greatly improved the working conditions of workers and shielded employees from contractors whose sole aim is profit making. Many private companies of the different times were exploiting workers by underpaying them, denying them good working conditions and using unconventional means in acquiring labor. The rights of minors were also emphasized and safeguarded by these acts.
This includes exemption of under age people from labor, as these acts defined and stated the age requirements. Equality was also emphasized. Previously, companies employing African-American would under pay them and use the extra money in under bidding. The acts have been instrumental in laying the foundation of the rights of workers and in turn facilitated maximum productivity.
Fulton, J. (1978). The Davis-Bacon Act: History, Administration, Pro and Con Arguments, and Congressional Proposals. Washington: Congressional Research Service, Library of Congress.
Matsushima, R. (1980). Implementation of the Service Contract Act of 1965. New York: Defense Technical Information Center
Sickle, V. (1952). The Walsh-Healey Public Contract Act. New York: American Enterprise Association.