The U.S. Department of Labor has released its annual memorandum regarding the rate for Service Contract Act (SCA) Health and Welfare Fringe Benefits. The new rate of $4.48 per hour (up from the 2017 rate of $4.41 per hour) is required in all government contract bids or other service contracts awarded on or after July 11, 2018.
The SCA health and welfare fringe benefits level for Hawaii will remain unchanged at $1.91 per hour.
The SCA health and welfare fringe benefits level for employees performing on contracts covered by EO 13706 will be $4.18 for each hour of work on the contracts.
As prescribed by the regulations, the benefit rate is derived from the latest Bureau of Labor Statistics (BLS) Employment Cost Index (ECI), summary of Employer Cost for Employee Compensation (ECEC). The rate will be posted on the Wage Determinations Online (www.wdol.gov) and Wage and Hour Division (WHD) (www.dol.gov/whd) websites.
SCA benefit change notices are not sent directly to contractors or subcontractors, so we wanted to make sure our SCA contractor clients were aware of this rate increase.
The obligation to pay employees prevailing wages and benefits in compliance with the SCA requirements falls to contractors and subcontractors, who are liable for any violations. However, it is the contracting agency’s obligation to provide correct and updated WDs to the prime contractor, and the prime contractor’s responsibility to flow-down updated WDs to their subcontractors.
Government contractors should check routinely to determine if new WDs have been provided to them by contracting agencies into their contracts. If the agency has not provided an updated WD as required, contractors should request that the agency do so and be sure to document their compliance efforts.
If you have questions regarding the updated rate and how it may impact your SCA population, contact our SCA subject matter specialists any time at 1.800.250.2741 ext. 170 or email us at email@example.com.