U.S. Department of Labor 
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210
MAY 18 2000
MEMORANDUM NO. 193
TO: ALL CONTRACTING AGENCIES OF THE FEDERAL
GOVERNMENT AND CONTRACTING AGENCIES OF
THE DISTRICT OF COLUMBIA
FROM: T. MICHEAL KERR
ADMINISTRATOR
SUBJECT: Service ct Health and Welfare Fringe Benefit Changes
In accordance with the requirements of Section 4.52 of Regulations, 29 CFR Part 4, the prevailing health and welfare fringe benefits issued under the McNamara O'Hara Service Contract Act (SCA) will be increased on June 1, 2000. As prescribed by the regulations, the new benefit rate is derived from the latest Bureau of Labor Statistics Employment Cost Index (EC1) summary of Employer Cost for Employee Compensation. Effective June 1, 2000, the new SCA health and welfare single benefit rate will be $1.92 per hour or $76.80 per week or $332.80 per month.
Solicitation/Contracts Affected
All Invitation for Bids opened, or other service contracts awarded on or after June 1, 2000, must include an updated SCA WD issued in accordance with the regulatory health and welfare fringe benefit determination methodology. In order to facilitate expedited processing of requests for updated WDs on solicitations that currently a contain a WD with the $1.63 per hour benefit level, contracting agencies:
May contact the Department of Labor on (202) 693-0529 between the hours of
8:15 a.m. and 4:45 p.m. and provide the SF 98 number, and the WD number(s) and
revision(s) that were provided with the old health and welfare rate in it. Beginning June 1, updated WDs will be mailed within 24 hours of the telephone request for an update. Contracting Officers operating under a Memorandum of
Understanding (MOU) for on-line access to SCA WDs should obtain their revised
WDs in accordance with the provisions of the MOU.
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Wage Determination for the State of Hawaii
Under Section 2(a) (2) of the Service Contract Act, fringe benefit payments that are required by state law may not be used to satisfy the employer's fringe benefit obligations. In Hawaii, most employers are required by law to provide health insurance coverage for their employers. Therefore, employer contributions that are made to satisfy the employer's obligations under the Hawaii mandated pre-paid Health Care Act may not be credited toward meeting the contractor's obligations under SCA. The SCA WDs have addressed this issue in the past by excluding the health insurance portion. Currently, most Hawaii WDs specify health and welfare benefit amount of $.68 per hour.
Consistent with past practices, and in recognition of the fact that Hawaii law requires employer's to provide health care coverage for most employees, SCA WDs for Hawaii will continue to exclude the health insurance portion of the benefits for all employees on whose behalf the employer provides benefits pursuant to the Hawaii prepaid Health Care Act. However, all employers are not required to make and, in fact, do not in some instances make contributions for certain employees under the Hawaii law, and the reduced fringe level is not appropriate for these employees. Therefore, effective June 1, 2000 the new SCA health and welfare fringe benefit rate for Hawaii will be:
$.70 per hour for all employees on whose behalf the contractor provides health
care benefits pursuant to the Hawaii prepaid Health Care Act. For those
employee's who are not receiving health care benefits mandated by the
Hawaii prepaid Health Care Act, the new health and welfare benefit rate will
be $1.92. For information regarding the Hawaii's prepaid Health Care Act,
please contact the Hawaii Employer's Council; P.O. Box 29699; Honolulu, HI
96820-2099; telephone number 1-800-836-1511.