Government Contact Archives - GSA National

DOL Announces 2025 Increased Health & Welfare Rates for SCA-Covered Contracts

Joe — Wed, 09 Jul 2025 18:28:37 +0000

The Department of Labor has announced the following fringe benefit (Health & Welfare) rate increases for SCA-covered contracts:

$5.55 per hour (increase from $5.36)
$5.09 per hour for EO 13706 contracts (increase from $4.93)
$2.42 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees
$1.96 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees on EO 13706 contracts

Effective July 7, 2025, the Wage and Hour Division (WHD) will post the increased Health & Welfare (H&W) rates on Wage Determinations. Contractors are required to provide the H&W rate from the Wage Determination that is applicable on the anniversary date of a multiple-year contract or at the beginning of the contract option period. Additionally, contractors should only provide the new H&W rate after their Contracting Officer has formally notified the contractor of the rate increase.

GSA National’s SCA experts are here to assist with any questions you may have regarding the new rates or average cost contracts. Please contact our team of SCA subject matter specialists with any questions.

dol-aam-2025 Download

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DOL Announces 2024 Increased Health & Welfare Rates for SCA-Covered Contracts

Joe — Wed, 17 Jul 2024 23:35:09 +0000

The Department of Labor has announced the following fringe benefit (Health & Welfare) rate increases for SCA-covered contracts:

$5.36 per hour (increase from $4.98)
$4.93 per hour for EO 13706 contracts (increase from $4.57)
$2.36 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees
$1.93 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees on EO 13706 contracts

Effective July 16, 2024, the Wage and Hour Division (WHD) will post the increased Health & Welfare (H&W) rates on Wage Determinations. Contractors are required to provide the H&W rate from the Wage Determination that is applicable on the anniversary date of a multiple-year contract or at the beginning of the contract option period. Additionally, contractors should only provide the new H&W rate after their Contracting Officer has formally notified the contractor of the rate increase.

The DOL also announced that average cost fringe benefit Wage Determinations will not be issued, and may not be used, for any new contracts after the date of this All Agency Memorandum (July 16, 2024).

Join us for a webinar review of the impact and implications of these announcements. Registration is open here.

FY-2024_SCA_HW_Fringe-Benefit_AAM-246_July-16-2024 Download

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DOL Increases Hourly Minimum Wage to $17.20 for Federal Contractors Starting January 1, 2024

Joe — Tue, 10 Oct 2023 19:34:58 +0000

The Wage and Hour Division of the U.S. Department of Labor (DOL) recently issued notice increasing the minimum wage for service and construction workers doing work on federal projects. Beginning on January 1, 2024, Executive Order 14026 will raise the minimum wage for these government contract workers from $16.20 to $17.20 per hour.

Government contractors in the service and construction sectors should evaluate how the minimum wage increase will affect their operations and pricing strategies when bidding on new government contracts.

These new wage increases – apply to employees performing work “on or in connection with” the following types of federal contracts:

Procurement contracts for construction covered by the Davis-Bacon Act.
Service contracts covered by the Service Contract Act.
Concessions contracts, including any concessions contracts excluded from the Service Contract Act by regulations at 29 CFR 4.133(b).
Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

GSA National’s #GovCon experts are here to assist with any questions you may have regarding the wage increase and its application to your government contract(s). Please contact our team of SCA and DBRA subject matter specialists with any questions.

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Service-Disabled Veteran-Owned Small Business and Federal Contracting

Joe — Tue, 03 Oct 2023 23:47:23 +0000

Disabled veterans in the United States have been granted increased preference for government contracts through various federal programs and regulations. The key program that provides this preference is the Service-Disabled Veteran-Owned Small Business (SDVOSB) program.

Under the SDVOSB program, the federal government sets aside contracts for small businesses that are at least 51% owned and controlled by service-disabled veterans. To qualify for SDVOSB status, the veteran must have a service-connected disability as determined by the Department of Veterans Affairs. The following are some details around SDVOSB awards and incentives:

Priority in Contract Awards: The federal government gives priority to SDVOSBs when awarding contracts. This means that if a qualified SDVOSB submits a competitive bid for a contract, it may be given preference over non-veteran-owned businesses.
Contract Set-Asides: Some contracts are specifically set aside for SDVOSBs, meaning that only eligible veteran-owned businesses can compete for those contracts.
Sole Source Awards: In certain cases, the government can award contracts on a sole source basis to SDVOSBs, meaning they don’t have to compete with other businesses for those contracts. This is typically done when it’s determined that only one SDVOSB can perform the work.
Subcontracting Opportunities: Large prime contractors who win government contracts are often required to subcontract a portion of the work to SDVOSBs to meet government-mandated subcontracting goals.

It’s important for disabled veterans who own businesses to go through the certification process to qualify for SDVOSB status. The process typically involves registering with the Department of Veterans Affairs (VA) and providing documentation to prove service-connected disability and ownership and control of the business.

These programs are designed to promote economic opportunities for service-disabled veterans and provide them with a competitive advantage when pursuing government contracts.

If you are an SDVOSB and are looking for guidance on bidding processes and/or have government contract compliance questions, feel free to schedule a consultative conversation today.

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DOL Announces 2023 Increased Health & Welfare Rates for SCA-Covered Contracts

Joe — Fri, 30 Jun 2023 19:17:27 +0000

The Department of Labor has announced the following fringe benefit (Health & Welfare) rate increases for SCA-covered contracts:

$4.98 per hour (increase from $4.80)
$4.57 per hour for EO 13706 contracts (increase from $4.41)
$2.15 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees
$1.74 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees on EO 13706 contracts

Effective June 27, 2023, the Wage and Hour Division (WHD) will post the increased Health & Welfare (H&W) rates on Wage Determinations. Contractors are required to provide the H&W rate from the Wage Determination that is applicable on the anniversary date of a multiple-year contract or at the beginning of the contract option period. Additionally, contractors should only provide the new H&W rate after their Contracting Officer has formally notified the contractor of the rate increase.

GSA National’s SCA experts are here to assist with any questions you may have regarding the new rate and its application to your SCA-covered employees. Please contact our team of SCA subject matter specialists with any questions.

Join us for a webinar review of the impact and implications of the reported rate increases. Registration is open here.

2023 SCA HW update_AAM 243 – 6-27-23 Download

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DOL Announces 2022 Increased Health & Welfare Rates for SCA-Covered Contracts

Joe — Mon, 27 Jun 2022 15:53:52 +0000

The Department of Labor has announced the following fringe benefit (Health & Welfare) rate increases for SCA-covered contracts:

$4.80 per hour
$4.41 per hour for EO 13706 contracts
$2.04 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees
$1.65 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees on EO 13706 contracts

Effective June 23, 2022, the Wage and Hour Division (WHD) will post the increased Health & Welfare (H&W) rates on Wage Determinations. Contractors are required to provide the H&W rate from the Wage Determination that is applicable on the anniversary date of a multiple-year contract or at the beginning of the contract option period. Additionally, contractors should only provide the new H&W rate after their Contracting Officer has formally notified the contractor of the rate increase.

All Agency Memorandum 239 for additional information..">Please refer to All Agency Memorandum 239 for additional information.Download

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DOL Announces Increased Health & Welfare Rates for SCA-Covered Contracts

Joe — Thu, 22 Jul 2021 20:02:42 +0000

The Department of Labor has announced the following fringe benefit (Health & Welfare) rate increases for SCA-covered contracts:

$4.60 per hour
$4.23 per hour for EO 13706 contracts
$1.94 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees (no change)
$1.63 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees on EO 13706 contracts (no change)

Effective July 16, 2021, the Wage and Hour Division (WHD) will post the increased Health & Welfare (H&W) rates on Wage Determinations. Contractors are required to provide the H&W rate from the Wage Determination that is applicable on the anniversary date of a multiple-year contract or at the beginning of the contract option period. Additionally, contractors should only provide the new H&W rate after their Contracting Officer has formally notified the contractor of the rate increase. Please refer to All Agency Memorandum 237 for additional information.

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The Importance of SCA and DBRA Compliance and Review of Recent DOL Violations

Joe — Fri, 02 Jul 2021 17:17:58 +0000

With the Department of Labor wage and hour investigations on the rise under the Biden Administration, now is an important time to review your company’s SCA and DBRA compliance practices.

GSA offers customized, in-house training on SCA and DBRA compliance. While regulations may be satisfied in a number of ways, our technical experts will educate your staff on practical applications that will show you how to remain compliant while keeping an eye on what matters most, your bottom line.

Recent DOL violation findings:

US Department of Labor recovers $1.5M in back wages for 242 home healthcare workers in Pennsylvania, Missouri
US Department of Labor recovers $98K for 39 construction workers denied overtime wages by Jamul employer
St. Louis metal finishing company pays $45K in back wages, benefits to employee terminated illegally while on protected leave
Court orders two Minnesota restaurants to pay $435k in back wages following US Department of Labor investigation
US Department of Labor recovers more than $1M for 362 gas pipeline workers in five states after federal court affirms investigation’s findings

To learn how GSA training could help you on your path to SCA compliance or how to be prepared for a DOL audit, visit our SCA Compliance area or contact us at 1.800.250.2741 or solutions@gsanational.com.

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New Tax Law Provisions Affect Employee Benefit Programs

wpengine — Tue, 26 Dec 2017 20:57:10 +0000

The Tax Cuts and Jobs Act (the “Act”) recently enacted by Congress will soon become effective. The primary focus of the new law is the reduction of corporate and individual income taxes. Nevertheless, a number of provisions of the Act affect employee benefit programs, which are summarized below. Except as otherwise noted, these employee benefit changes are effective for plan or tax years, as applicable, beginning on or after January 1, 2018.
Repeal of ACA Individual Responsibility Penalty
Under the individual responsibility “play-or-pay” rules of the Affordable Care Act (“ACA”), individuals must obtain minimum essential health coverage if they can afford to do so. If an individual can afford health insurance but chooses not to buy it, the individual is subject to a penalty tax. The penalty currently is the greater of 2.5% of household income or $695 per adult ($347.50 per child under 18).
To provide individuals with evidence of this insurance coverage, insurance companies must provide a Form 1095-B to covered individuals. Employers that maintain self-insured medical plans will provide a Form 1095-C to covered employees.
Large employers (those with more than 50 full-time equivalent employees) are subject to a separate employer responsibility mandate obligating them to provide qualified coverage to full-time employees. The failure to provide the coverage exposes them to an excise tax penalty. Large employers must also file with the IRS a Form 1095-C for each full-time employee reporting as to the coverage provided (or not provided as the case may be) to the individual. A copy of the Form 1095-C was then also be provided to each full-time employee.
The provision of the ACA requiring individuals to have qualified insurance coverage, or to pay a penalty for the failure to do so, has effectively been eliminated, beginning in 2019. It will remain in effect for 2018. The elimination is made via the reduction of the penalty to $0. The separate employer responsibility coverage mandate penalty was not similarly eliminated.
The effective repeal of the individual responsibility penalty does not have a direct effect on an employer. However, for the 2019 plan year and beyond, large employers presumably will not be required to file and provide to employees Form 1095-Cs to its employees, evidencing their coverage under the plan (since the information is not required by the individuals for purposes of completing their tax returns). A large employer will nevertheless still be required to file with the IRS an abbreviated version of the Form 1095-Cs evidencing the offering of coverage to full-time employees, because the employer responsibility mandate is still effective.
Business Tax Credit for Paid Family or Medical Leave
For 2018 and 2019, eligible employers will be allowed to claim a general business tax credit equal to 12.5% of the amount of wages paid to qualifying employees during any period in which such employees are on family and medical leave. To qualify for the business tax credit, the rate of paid leave must be at least 50% of the wages normally paid to an employee. The credit is increased by 0.25 percentage points (but not above 25%) for each percentage point by which the rate of paid leave exceeds 50%.
The maximum amount of family and medical leave that may be taken into account with respect to any employee for any taxable year is 12 weeks. To qualify for the credit, an employer must have a written policy that allows all qualifying full-time employees not less than two weeks of annual paid family and medical leave. The policy must also allow qualifying part-time employees a commensurate amount of leave on a pro rata basis.
A “qualifying employee” means any employee who has been employed by the employer for one year or more, and who for the preceding year, had compensation not in excess of 60% of the compensation threshold for highly compensated employees (which for 2018 means not in excess of $72,000).
“Family and medical leave” is defined as leave described under the federal Family and Medical Leave Act (FMLA). If an employer provides paid leave as vacation leave, personal leave, or other medical or sick leave, this paid leave will not be considered to be family and medical leave that is eligible for the business.
Qualified Stock Grants for Private Employers
Special tax rules apply to property, including employer stock, transferred to an employee in connection with the performance of services. Under these rules, an employee generally must recognize income in the taxable year in which the employee’s right to the stock is transferable or is not subject to a substantial risk of forfeiture, whichever occurs earlier (referred to herein as “substantially vested”). Thus, if the employee’s right to the stock is substantially vested when the stock is transferred to the employee, the employee recognizes income in the taxable year of such transfer, in an amount equal to the fair market value of the stock as of the date of transfer (less any amount paid for the stock). If at the time the stock is transferred to the employee, the employee’s right to the stock is not substantially vested, the employee does not recognize income attributable to the stock transfer until the taxable year in which the employee’s right becomes substantially vested. In this case, the amount includible in the employee’s income is the fair market value of the stock as of the date that the employee’s right to the stock is substantially vested (less any amount paid for the stock). The deferral elections must be made no later than 30 days after the stock becomes vested.
The Act allows private companies (i.e., those who do not have stock tradable on an established securities market) to establish a plan offering employees the right to elect to defer the recognition of income company stock acquired upon the exercise of stock options or the settlement of restricted stock units for up to five years. The deferral election must be made no later than 30 days after the stock becomes vested.
A key condition of the new provision is that the company must have a written plan under which at least 80% of all employees providing services to the company in the United States are granted qualified stock. Because of this rule, it is expected that the plans will more typically be adopted by start-up companies.
Extension of Plan Loan Offset Rollover Deadline
Qualified retirement plans, including 401(k) plans, often allow for loans to be made to participants. In turn, the loan policies for such plans typically provide that a participant’s outstanding loan becomes due and payable upon the participant’s termination of employment or the termination of the plan. If, in such a situation, the participant does not fully repay the outstanding loan within the time allowed by the plan, the loan balance (referred to as a loan offset) is treated as an actual taxable distribution from the plan (referred to as a loan offset). The participant if, under age 59½, will then also be subject to the 10% additional income tax on early distributions (unless an exception applies).
Under the current rules, a participant who has, or who can scrape together, additional funds can make a rollover into an IRA or eligible employer plan that will accept it. For example, if the loan offset amount is $1,000, the participant can within 60 days use his or her own funds and make a rollover contribution of $1,000 into an IRA or other eligible employer plan so as to avoid the taxation of the imputed loan offset distribution.
Under the Act, the period during which a qualified plan loan offset amount may be contributed to an IRA or other eligible retirement plan as a rollover contribution is extended from 60 days after the date of the offset to the due date (including extensions) for filing the participant’s federal income tax return for the taxable year in which the plan loan offset occurs. However, the extended deadline is available only if the plan loan offset amount arises by reason of the termination of the plan or the failure to meet the repayment terms of the loan because of the employee’s separation from service, whether due to layoff, cessation of business, termination of employment, or otherwise.
Observation: The loan offset rollover deadline is not a plan qualification rule. Therefore, plan documents typically will not be required to be revised to reflect this change in law. However, employers will wish to review and revise as appropriate information provided to participants regarding their plan loan programs. In addition, if a plan includes a plan loan feature, the IRS tax notice provided to participants who are eligible for distribution (now entitled “Your Rollover Options”) should be revised to make mention of the new favorable loan offset rollover deadline.
IRA Conversions and Recharacterizations
Currently, if an individual makes a contribution to an IRA (traditional or Roth) for a year, the individual is permitted to recharacterize the contribution as a contribution to the other type of IRA (traditional or Roth) by making a direct transfer to the other type of IRA before the due date for the individual’s income tax return for that year. In the case of a recharacterization, the contribution will be treated as having been made to the transferee IRA (and not the original, transferor IRA) as of the date of the original contribution. Both regular contributions and conversion contributions to a Roth IRA can be recharacterized as having been made to a traditional IRA.
Under the Act, the special rule that allows a contribution to one type of IRA to be recharacterized as a contribution to the other type of IRA does not apply to a conversion contribution to a Roth IRA. In other words, recharacterization cannot be used to unwind a Roth conversion. However, recharacterization is still permitted with respect to other contributions. For example, an individual may make a contribution for a year to a Roth IRA and, before the due date for the individual’s income tax return for that year, recharacterize it as a contribution to a traditional IRA.
Increase in Allowable Volunteers’ Service Award Benefits
Benefits solely representing length of service awards to bona fide volunteers (or their beneficiaries) on account of qualified services performed by the volunteers are not subject to tax rules that typically would require the taxation of such awards when earned vested. Rtypically applicable to deferred compensation arrangements. Instead, benefits under a length of service award plan are includible in income when paid to the recipient under normal tax rules. For this purpose, qualified services consist of firefighting and fire prevention services, emergency medical services, and ambulance services. An individual is treated as a bona fide volunteer for this purpose if the only compensation received by the individual for performing qualified services is in the form of (1) reimbursement or a reasonable allowance for reasonable expenses incurred in the performance of such services, or (2) reasonable benefits (including length of service awards) and nominal fees for the services, customarily paid in connection with the performance of such services by volunteers.
Currently, the favorable deferred compensation treatment applies only if the aggregate amount of length of service awards accruing for a bona fide volunteer with respect to any year of service does not exceed $3,000. The Act increases the service award limit with respect to any year of service to $6,000, and adjusts that amount in $500 increments to reflect changes in cost-of-living for future years.
Loss of Tax Deduction for Qualified Transportation Benefits
Currently, employers that provide qualified transportation fringe benefits to employees can claim a tax deduction for the cost of such benefits. In addition, Code Section 132(f) provides for a limited exclusion of such employer-paid benefits from employee wages. In addition, an employer may allow employees to pay for all or a portion of the cost of the transportation fringe benefits on a salary reduction pre-tax basis.
Qualified transportation fringes include qualified parking (parking on or near the employer’s business premises or on or near a location from which the employee commutes to work by public transit), transit passes, vanpool benefits, and qualified bicycle commuting reimbursements.
Under the Act, employers can no longer claim a tax deduction for qualified transportation fringe benefits. The employer-provided benefits will continue to be tax exempt to employees, so Section 132(f) salary reduction arrangements will continue to be allowed. However, while the benefits will be tax-free to an employee, an employer will no longer be able to deduct the costs of those benefits.
Unrelated Business Taxable Income for Fringe Benefits
Section 501(a) exempts certain organizations from federal income tax. These tax-exempt organizations include those described in Code Section 501(c) (such as charitable organizations and social welfare organizations). In addition, most tax-exempt organizations are subject to the tax on unrelated business income. The unrelated business income tax (“UBIT”) generally applies to income derived from a trade or business regularly carried on by the organization that is not substantially related to the performance of the organization’s tax-exempt functions. An organization that is subject to UBIT and that has $1,000 or more of gross unrelated business taxable income must report that income on Form 990-T (Exempt Organization Business Income Tax Return).
UBIT will henceforth include any expenses paid or incurred by a tax-exempt organization for qualified transportation fringe benefits (as defined earlier), a parking facility, or any on-premises athletic facility.
Presumably, the purpose of this provision of the Act is to treat tax-exempt organizations somewhat equally to taxable employers in regard to the tax treatment of fringe benefits.
Temporary Suspension of Exclusion for Qualified Bicycle Commuting Reimbursements
Qualified bicycle commuting reimbursements of up to $20 per qualifying bicycle commuting month are excludible from an employee’s gross income. A qualifying bicycle commuting month is any month during which the employee regularly uses the bicycle for a substantial portion of travel to a place of employment and during which the employee does not receive transportation in a commuter highway vehicle, a transit pass, or qualified parking from an employer.
The Act suspends the tax exclusion for 2018 through 2025. It will be reinstated in 2026.
Repeal of Income Exclusion of Moving Expense Reimbursements
Qualified moving expense reimbursements provided to an employee by an employer traditionally have been excluded from an employee’s taxable income. The Act repeals the income exclusion for qualified moving expense reimbursements, other than reimbursements made to a member of the Armed Forces of the United States on active duty who moves pursuant to a military order.
Restrictions on Income Exclusion of Employee Achievement Awards
A qualified employee achievement award provided to an employee is excluded from the employee’s wages for employment tax purposes. An employee achievement award is defined as an item of tangible personal property given to an employee in recognition of either length of service or safety achievement and presented as part of a meaningful presentation.
The Act adds a definition of “tangible personal property” that may qualify as a tax-excludable deductible employee achievement award. It states that tangible personal property does not include cash, cash equivalents, gift cards, gift coupons or gift certificates (other than arrangements conferring only the right to select and receive tangible personal property from a limited array of such items pre-selected or pre-approved by the employer). It also does not include vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, other securities, and other similar items.

* * *

This article was written by Walter W. Miller. Walter helps employers to comply with the myriad of laws governing retirement plans and other employee benefit programs. A primary focus of Mr. Miller’s current practice is the Affordable Care Act, including the employer “play-or-pay” mandates. He works with clients to evaluate the effect of the new law on their group health plans, and offers advice as to the manner of addressing the new rules. He is listed both in The Best Lawyers in America and SuperLawyers as being among the top attorneys in the field of employee benefits. He has also been elected as a Fellow of the American College of Employee Benefits Counsel, which is regarded as the preeminent professional association for employee benefits attorneys.

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Guidance For Employer Shared Responsibility Payments Announced

wpengine — Wed, 15 Nov 2017 16:52:44 +0000

The IRS has announced new guidance regarding the Employer Shared Responsibility Payments (the “ESRPs”), which are the ACA penalties assessable to “Applicable Large Employers” for failing to provide affordable health care coverage to eligible full-time employees.
Although the IRS began collecting information from employers (via the Form 1095-C), beginning with the 2015 calendar year, it has not yet assessed any of the ESRP “play-or-pay” penalties. The new guidance forewarns that the IRS is gearing up for the penalty collection program. The guidance states that notices for penalties pertaining to 2015 will begin being issued in “late 2017.”
The IRS has also released a sample of the penalty notice (Letter 226J). The letter gives notice of a tentative penalty assessment for each non-exempt full-time employee who received a premium tax credit for health insurance coverage purchased on a state or federal Marketplace exchange.
Because of the complexity of the Form 1095-C program, it is expected that the IRS’s records are not entirely accurate. Consequently, we should assume that a notice will be sent to most employers, with the odds increased for larger employers.
Unfortunately, the deadline for responding to the IRS challenging its report is very short. Specifically, the appeal must be submitted within 30 days of the date of the penalty notice, and not 30 days from the receipt of the letter. The response date will be printed on the letter.
Because the timeframe for challenging the IRS’s tentative penalty assessment is very short, employers may wish to prepare for the inevitable receipt of the notice. Actions that they should consider taking are outlined below.

Identify to whom the notice will be sent, and alert that person or office to be on the lookout for the notice. Presumably, but not necessarily, it will be sent to the contact person listed in Part 1 of the Form 1094-C transmittal form.
Have copies of the 2015 Form 1095-Cs available to compare with the listings that will be included with the Letter 226J penalty notice.
Alert their Form 1095 vendor that you may need supporting information and reports on a quick turnaround basis.
Assemble a team to review and respond to the notice.

The sample penalty notice letter released by the IRS makes mention of the form to be used in challenging the penalty (Form 14764). A copy of that specific form has not yet been released. We will post a link to Form 14764 upon its release.
If you have questions about the new guidance, contact us at solutions@gsanational.com or 1-800-250-2741 ext. 170.

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