Business and labor leaders urged the Reagan administration yesterday to drop its proposed revisions of the 1965 Service Contracts Act, which sets minimum wages paid by contractors servicing federal agencies.
Changes suggested by the administration on Aug. 14 would lower pay for janitorial and other service workers on federal projects, destabilize labor-management relations and undermine the original intent of the act, according to testimony before the House subcommittee on labor-management relations yesterday.
If the proposed changes take effect, "They will not merely amend an act of Congress, they will practically repeal it . . . by administrative fiat," said George Poulin, vice president of the International Association of Machinists and Aerospace Workers--a 921,000-member union that also represents 2,000 service workers at the Kennedy Space Center.
The 1965 act was designed to block exploitation of workers by contractors bent on winning federal service contracts by paying below-market wages. The law says most federal contractors on jobs worth $2,500 or more must pay wages and benefits at least equal to the federal minimum, currently $3.35 an hour, or equal to the "prevailing wage" for that kind of work in an area if the prevailing wage is higher.
Under current regulations, the secretary of Labor, who sets the prevailing wage, may exempt a service contractor from the act "upon a strong . . . showing" that the exemption "is necessary in the public interest. . . ."
But the Reagan administration wants to broaden the exemption to include many janitorial contracts and service workers in federal visitor information facilities, aircraft engine maintenance, demolition of federal buildings, timber sales, research and development and computer maintenance.