What is a Service Contract Act (SCA) wage and fringe rate?

If you’re in the construction business and you do service work on a government-funded project or building, such as a landscaping or cleaning service, then you are subject to paying service employees the contract-mandated wage rate and fringe rate, including overtime, for contracts over $2,500.  

According to the McNamara-O-Hara Service Contract Act (SCA), the Department of Labor will issue wage and fringe benefit determinations for these service workers on a contract-by-contract basis, taking into account previous contracts, CBAs with unions, and the rates that prevail in the area, similar to the Davis Bacon Act requirements for paying prevailing wage rates to construction workers on government-funded construction projects. 

Most Time and Attendance Systems cannot handle the complexity of assigning wages and fringes based on multiple wage-decision factors.


How can IDI help?

IDI can automate your time-consuming processes!  Our Time Bank™ Multiple Labor Rates solution can be used for companies employing service workers for government funded projects, which requires paying contract-mandated wage rates and fringe rates. Our solution removes the need to rely on time-consuming and error prone manual calculations for compliance in order to avoid a Department of Labor violation.

When Time Bank is run at the end of the pay period, it retrieves the time and labor information from the time system and associates the specific rates of pay, including any premiums and benefit earnings, with the contract, job, and worker classification. After determining rates, Time Bank calculates the weekly average rate of pay, or FLSA rate, used for all overtime hours in accordance with FLSA guidelines.

With the click of a button, Time Bank reads the rates from a stored user-maintained table or from a client-provided comma-delimited file, the calculation is made, and the results are passed to payroll.

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ADDITIONAL RESOURCES:

Department of Labor

IDI Construction Solutions Video 

IDI Construction Solutions Blogs