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089918 1 (1972-09-29)

handle is hein.gao/gaobacvvo0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE cc U' 1%WASHINGTON, D C 20548 MANPOWER AND WELFARE SEP 29 1972 DIVISION Dear Mr Zarb As part of our review of the procedures and methods used by the Department of Labor in making determinations of the minimum wages required to be paid to service employees under the Service Contract Act of 1965, we reviewed the procedures used to prescribe minimum wage rates and fringe benefits for drivers on star route mail hauling contracts awarded by the Post Office Department (now United States Postal Service) Our review of mail haul wage determinations showed that the minimum wage rates prescribed by the Department were not based on prevailing wage rates for similar work We reported our preliminary findings to the Assistant Secretary for Workplace Standards on August 31, 1970, and to the Assistant Postmaster General, Bureau of Operations on November 5, 1970. The Service Contract Act of 1965 (41 U S C 351) requires that every contract, not exempt by section 7 of the act, entered into by the United States or the District of Columbia in excess of $2,500, the principal purpose of which is to furnish services through the use of service employees, contain a provision specifying the minimum monetary wages to be paid the various classes of service employees These wages, including fringe benefits, are to be determined by the Secretary of Labor in accordance with prevailing rates and fringe benetits for such employees in the locality A portion of the star route mail haul contracts are awarded each year for a 4-year period on a cycle basis The first wage determinations applicable to these contracts were made in 1966, but in 1967, the Department declared a moratorium on wage determinations for mail haul contracts which lasted approximately one year. As a result, contracts were awarded during this period without wage determinations At the time of our initial review in 1970, most mail haul contracts in 40 percent of the States were not covered by wage determinations under the Service Contract Act We asked the Department, in our August 1970 letter, to furnish its views and comments on the entire matter of prescribing minimum wage rates for star route mail haul contracts, especially on (1) the appropriateness of the use of Bureau of Labor Statistics wage surveys and of the use of union wage rates for the star route wage determinations, and (2) the feasibility of establishing the star route service as a separate service for wage determination purposes By letter dated December 11, 1970, the Administrator, Workplace Standards Administration, furnished us comments on several aspects of the Department's review of the matter and stated that the final reply to our suggestion would be made in due course

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