As a follow-up to Aronson’s webinar on Service Contract Act Basics and Pricing Implications, we have provided answers to several attendee questions below.
What should be done if the job function of my employees doesn’t match a job function in the Wage Determination (WD)? If the job function is for a “service employee” covered by SCA and does not align with a Directory of Occupations labor category identified in the WD, then a conformance process needs to take place. For more information on the conformance process, click here.
Can wages and health and welfare cash payment (cash in lieu of benefits) be paid together in one paycheck? Cash paid in lieu of benefits to satisfy the health and welfare requirement may be included on the same paycheck as wages but must be identified as a separate pay type and NOT added to wages.
To which hours do the health and welfare requirement apply? Health and welfare must be paid on all hours paid up to 40 hours per week. These hours include paid vacation, sick leave, and holidays.
If the government or prime does not immediately modify the contract when a new wage determination is released, do the newest health and welfare and wage requirements need to be paid retroactively? When new wage determinations are incorporated into a contract by modification, they are effective the earlier of the modification effective date or the modification signed date.
How do you calculate the health and welfare provided to an employee if he/she receives some benefits as well as cash in lieu of benefits? The required health and welfare can be discharged 1) as all benefits, 2) as all cash in lieu of benefits, or 3) a combination of cash and benefits. When you are satisfying the health and welfare requirement through a combination of benefits and cash paid, calculate the cash paid in lieu of benefits by reducing the required health and welfare amount by the hourly cost of the benefits taken. The cash in lieu of benefits amount may be adjusted upwards or downwards as the cost of benefits and/or health and welfare requirement increases or decreases.
About the Author: Barbara Connell is a consultant in Aronson LLC’s Government Contract Services Group, where she supports clients in a variety of government contracting areas, including GSA Schedules, Service Contract Act compliance and business system testing.
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