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U.S. Department of Labor Announces Updated Wage Determinations for Government Contractors Under Service Contract Labor Standards
The U.S. Department of Labor recently announced updated wage determinations that will impact government contractors across the country. These new determinations reflect increased health and welfare fringe benefit rates under the Service Contract Labor Standards, affecting contracts issued by the federal government in amounts exceeding $2,500.
Under the updated wage determinations, government contractors will now be required to contribute specific amounts per hour of work for health and welfare benefits, depending on the type of contract and location of the work. These changes aim to ensure that service employees working on federal contracts receive adequate health and welfare benefits.
One significant change is the requirement for contractors to pay prevailing health and welfare fringe benefits at a rate of $5.36 per hour of work on contracts not subject to Executive Order 13706. Additionally, contractors must now pay fringe benefits on an individual employee basis, rather than on an average-cost basis as previously permitted.
Government contractors bidding on solicitations issued after July 16, 2024, and those receiving contract awards subject to the Service Contract Labor Standards must comply with these new wage determinations. Contractors must also comply upon receipt of a contract modification that incorporates the new wage determinations.
Contractors who experience an increase in prevailing wages or fringe benefits as a result of the new determinations may seek an equitable adjustment to their contract. This process involves notifying the Contracting Officer within thirty days of receiving the new wage determination and outlining any claimed increases in wages or fringe benefits.
Overall, these updated wage determinations represent a significant change for government contractors and aim to ensure that service employees working on federal contracts receive fair compensation and benefits.
