The U.S. Department of Labor Wage and Hour Division increased the Service Contract Act’s most prevalent fringe rate to $4.48 if the contract is not subject to Executive Order 13706 (paid sick leave). All service contracts subject to Executive Order 13706 will utilize the reduced $4.18 SCA Health & Welfare Benefit Rate.
Contractors must remember that this increase is not automatic, and the contracting officer must implement it before it goes into effect. Contractors should be aware that Hawaii has different rates as a result of the sick leave executive order as well as the Hawaii Prepaid Healthcare Act. There also may be different rates for specific industries. Contractors should review applicable wage determinations to identify appropriate fringe rates. A copy of the Wage and
Hour memorandum can be viewed at: https://www.dol.gov/whd/govcontracts/sca/sf98/aam227.pdf