New Changes for Service Contract Act Wage Determinations

The Department of Labor (“DOL”) has released a Memorandum specifying a few changes for Wage Determinations (“WDs”).  The Locality Pay Survey (“LPS”) portion of the National Compensation Survey published by the Bureau of Labor Statistics (“BLS”) previously served as the primary data source for determining prevailing wage rates under the Service Contact Act (“SCA”).  However, the LPS was eliminated. As a result, the DOL has decided to use the Occupational Employment Statistics (“OES”) for calculating SCA prevailing wage rates. This transition will affect the SCA WDs in the following ways:

  • The DOL’s Wage and Hour division (“WHD”) will begin to issue locality-based WDs based on the OES survey’s geographic areas. As a result, the number of area-wide SCA WDs published by WHD will increase in part because the OES survey provides wage data for substantially more geographic areas than the LPS. Utilizing the OES survey as the primary data source for SCA WDs will therefore enable the WHD to publish WDs that generally cover smaller geographic areas.
  • There was a chance that wage rates could go down or up significantly because the data sources are different.  To address that issue, the DOL will use current WD rates as a floor and cap increases at 10%.  DOL has published a crosswalk between the old WDs (denoted by a 2005-xxxx) and new WDs (2015-xxxx) to help contracting agencies determine which WDs are the correct ones to utilize.  Please note that the new WDs should not be utilized until they are incorporated into your contract.
  • DOL has updated its directory of occupations to reflect new job functions which can be found at wdol.gov.  This revised Directory includes updated occupational definitions for existing SCA classifications as well as definitions for 27 new classifications found on area-wide WDs that will be issued under WHD’s new methodology.

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