The U.S. Department of Labor released memorandum number 225 on July 25, 2017 announcing an increase to the prevailing health and welfare fringe benefit rate under the McNamara-O’Hara Service Contract Act (SCA). The rate will increase to $4.41 per hour. An exception to the $4.41 rate are contracts subject to EO 13706, Paid Sick Leave. The DOL set a new rate of $4.13 an hour ($1.63 in Hawaii), to help offset the cost of the sick leave requirement.
The new rate will be posted on the Wage Determinations Online (www.wdol.gov) and the Wage and Hour Division (WHD) (www.dol.gov/whd) websites effective August 1, 2017.
For existing contracts, government contractors should check routinely to verify if new wage determinations (WD) have been published by contracting agencies (or, in the case of subcontractors, by their prime contractor) by incorporation into their contracts. Generally, the new rate will go into effect on the anniversary date (annually, or every two years for non-appropriated funds contracts) or option renewal/modification date of these contracts — whichever date for a particular contract triggers incorporation of a new WD by the contracting agency.
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.
Further information is available at: ow.ly/JvCW30dZwQ5