Service Contract Act Wage Determination Compliance Requirements
The Service Contract Act (SCA) is a crucial legislation that sets minimum wages, fringe dollars, vacation, holidays, and sick leave for employees working on federal service contracts in the domestic United States and its territories. Understanding and adhering to the SCA is essential for contractors to ensure they meet their obligations and operate within the law.
The SCA fringe amount may be paid in the form of additional cash or as bona fide fringe benefits. SCA fringe benefits must be furnished separately from normal wages, either cash-in-lieu of employee benefits or equivalent employee benefits, but these employee benefits must be properly tracked on an hourly basis.
The hourly fringe benefits requirement is called the fringe rate. Proper tracking and administration can be difficult for government contractors but putting the fringe dollars towards employee benefits can provide competitive advantages. A contractor that is putting their SCA fringe dollars towards bona fide employee benefits is at an advantage over competitors that pays the fringe rate out in cash. Assured Partners has solutions to ease those difficult administration and tracking fringe dollar issues for you.
Have you encountered challenges with Service Contract Act compliance or fringe benefit administration?
Discover how AssuredPartners can help you navigate these requirements.
Advantages include reducing the payroll tax burden and overall healthcare spending, as well as the benefit of compliance. Wages designated in the wage determination cannot be used to fund fringe benefits because the fringe dollar amount and wage amounts set out in the wage determination are two separate requirements that a contractor must keep track of for proper compliance with The Act.
When working with the federal government, it is essential that you understand these requirements and have a proper plan in place. The AssuredPartners GovCon team is available to help you craft that solution.
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