On June 30, 2015, the U.S. Department of Labor (DOL) increased the McNamara-O’Hara Service Contract Act (SCA) Health & Welfare benefits from $4.02 to $4.27. A notice is not sent directly to contractors and unfortunately for them the importance of this change lies with timing. For those contractors that are currently working diligently on preparing cost proposals, this increase will directly affect you. According to the DOL memorandum that put this change into effect, “all invitation for bids opened, or other service contracts awarded on or after June 30, 2015, must include an updated SCA WD issued in accordance with the regulatory health and welfare (H&W) fringe benefit determination methodology.” So if you have recently submitted a proposal subject to the SCA, we suggest that you ensure that your H&W meets the SCA H&W requirement of $4.27.
Of passing interest, President Obama on September 7, 2015, issued Executive Order (EO) 13706, “Establishing Paid Sick Leave for Federal Contractors”. The EO requires the DOL to issue a regulation by September 30, 2016 which means there will likely be a proposed rule, public comments, and a final or interim rule effective in contracts executed October 1, 2016 (or later). As currently stated, it appears that the new requirement for paid sick leave will be in addition to the H&W requirements within the Service Contract Act; however, that will need to be vetted and clarified as the EO transitions into a contractual regulation.