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.