Service Contract Act Rate Change

Service Contract Act Prevailing Wage Rate Change

As of July 5th, 2019 the prevailing health and welfare fringe benefits rate issued under the
McNamara-O’Hara Service Contract Act (SCA) increased to $4.54 per hour*
According to U.S. Department of Labor, All invitations for bids opened and service contracts awarded on or after July 5, 2019, must include an updated SCA Wage Determination (WD) that comports with the regulatory health and welfare fringe benefit determination methods.

The Department of Labor’s Wage and Hours Division calculates rates in two ways, High Level and Low Level. “High-Level” cost is the company total across all employees. “Low-Level” cost is the individual employee level cost. It is important to know how your contract is structured to calculate rates. According to DOL, This new rate must be applied on an employee by employee (low-level) basis UNLESS your existing contract is grandfathered in based on previous “High Level” calculation.

It is also helpful to note this is only a health and welfare rate change so Contracting agencies will not be required to request a revised Wage Determination. This rate change only applies to contracts covered under Service Contract Act. Construction contracts covered under the Davis Bacon Act are unaffected.

*This rate applies to all U.S. states except Hawaii.

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