• $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.

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• $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).

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.

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

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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.

The post DOL Increases Hourly Minimum Wage to $17.20 for Federal Contractors Starting January 1, 2024 appeared first on GSA National.

• $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.

The post DOL Announces 2023 Increased Health & Welfare Rates for SCA-Covered Contracts appeared first on GSA National.

For federal contract brokers, who act as intermediaries between government agencies and contractors, understanding and ensuring SCA compliance is crucial for several reasons:

• Legal Requirement: Brokers must ensure that the contractors they work with are compliant with all applicable laws, including the SCA. Failure to do so can result in legal liabilities and potential penalties for both the broker and the contractor.
• Contract Eligibility: Many government contracts include SCA compliance as a mandatory requirement for bidding and winning the contract. Brokers need to ensure that the contractors they represent are compliant with the SCA to maintain eligibility for these contracts.
• Reputation and Trust: Brokers play a vital role in connecting government agencies with qualified contractors. By ensuring SCA compliance, brokers can build a reputation for working with reputable and responsible contractors who adhere to labor laws. This enhances the broker’s credibility and trustworthiness in the eyes of government agencies.
• Risk Mitigation: Non-compliance with the SCA can lead to audits, investigations, and potential legal consequences for contractors. Brokers who work with non-compliant contractors may also face risks such as contract termination, financial losses, and damage to their own reputation. Ensuring SCA compliance helps mitigate these risks.
• Compliance Assistance: Brokers can provide valuable guidance and support to contractors in understanding and meeting SCA compliance requirements. This includes helping contractors determine the appropriate wage rates and fringe benefits, ensuring accurate record-keeping, and facilitating compliance with reporting and notification obligations.

By understanding and promoting SCA compliance, brokers can effectively navigate the complex landscape of federal government contracting and contribute to the success of both the contractors they represent and the government agencies they serve.

What impact, if any, does SCA and the Health and Welfare (H&W) rate have on the profitability of a government contract?

Understanding SCA and the H&W rate can have a significant impact on the profitability of a government contract. Here’s how:

• Cost Estimation and Pricing: The SCA requires contractors to provide certain fringe benefits, including H&W benefits, to covered employees. The health and welfare rate represents the cost of these benefits. When estimating costs and pricing a government contract, contractors need to accurately account for the H&W rate to ensure they cover the cost of providing these benefits. Failure to accurately include this rate can result in underestimating costs, leading to reduced profitability or even losses.
• Labor Costs: The SCA establishes minimum wage standards for covered employees. Contractors must pay employees at least the prevailing wage rates specified in the contract. The H&W rate is often included as part of the prevailing wage rate. Failure to properly account for these rates can result in non-compliance, potential penalties, and increased labor costs that impact profitability.
• Competitive Bidding: Government contracts are often awarded through competitive bidding processes. Understanding the SCA and the H&W rate allows contractors to accurately factor in these costs when preparing bids. Properly accounting for these rates ensures that contractors can offer competitive pricing while still maintaining profitability.
• Cost Control and Management: SCA compliance involves tracking and documenting fringe benefit expenses, including H&W costs. Having a clear understanding of these requirements enables contractors to effectively manage and control their costs related to providing benefits. Efficient cost management can help improve profitability by minimizing expenses and optimizing resource allocation.
• Compliance Risks and Penalties: Non-compliance with the SCA, including inaccurate calculation or payment of the H&W rate, can lead to investigations, penalties, and potential contract termination. These consequences can result in financial losses and damage to a contractor’s reputation. Understanding the SCA and adhering to its requirements mitigates compliance risks, ensuring that profitability is not affected by costly penalties or reputational damage.
• Contract Renewals and Extensions: Government contracts are often subject to renewals or extensions. Maintaining SCA compliance, including accurate calculation and payment of the H&W rate, is essential for contract performance evaluations. Compliance can contribute to a positive track record and increase the likelihood of contract renewals or extensions, securing continued profitability for the contractor.

As you can see, understanding the SCA and the H&W rate is crucial for accurately estimating costs, pricing contracts competitively, managing labor expenses, ensuring compliance, and minimizing risks. By properly incorporating these factors into contract planning and execution, contractors can enhance profitability and maximize their chances of success in the government contracting space.

If you have questions regarding the Service Contract Act, contact our subject matter specialists today at SCA@gsanational.com, or Schedule a Meeting here!

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• $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.

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.

The post DOL Announces 2022 Increased Health & Welfare Rates for SCA-Covered Contracts appeared first on GSA National.

The W&H Division is responsible for enforcing some of the most comprehensive labor laws affecting more than 148 million workers. Investigator responsibilities include the following:

• Conducting investigations to determine if employers are paying workers and affording them their rights as the law requires.
• Promoting compliance through outreach and public education initiatives.
• Supporting efforts to combat worker retaliation and worker misclassification as independent contractors. 

“Adding 100 investigators to our team is an important step in the right direction,” said Acting Wage and Hour Administrator Jessica Looman. “We anticipate significantly more hiring activity later in fiscal year 2022. While appropriations will determine our course of action, we are optimistic we will be able to bring new talented professionals onboard to expand our diverse team.” 

In fiscal year 2021, the Wage and Hour Division collected $230 million in wages owed to 190,000 workers.

GSA National’s Government Contract experts are here to answer any questions you may have regarding H&W investigations, or compliance challenges your organization may be up against. Please contact our team of government contract subject matter specialists with any questions.

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