The Service Contract Act

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The 2023 Service Contract Act fringe rate was announced in July 2023 at $4.98 or $4.57 per hour. Employers can offer employees fringe benefits in lieu of a cash payment.

Service Contract Act (SCA) – Contractor Provided Bona-Fide Fringe Benefits

10/10/2023 by: Jim Stevenson

Providing The Service Contract Act (SCA) employees benefits can reduce costs for contractors on bids and increase competitiveness against peers while simultaneously providing employees with valued benefits. These benefits may give you a competitive edge in the recruitment and retention of employees. The SCA’s connection to employee benefits is a major factor in understanding the Service Contract Act itself.

A bona-fide fringe benefit is something that an employer gives to its employees to take care of them and their families. The SCA service employees are entitled to certain bona-fide benefits. The most common SCA employee benefits are health insurance, disability insurance, retirement, vision, dental, and life insurance. Fringe benefits are what happens when an employer uses the health and welfare fringe rate to provide a benefit for their employees. For example, the 2023 Service Contract Act fringe rate was announced in July 2023 at $4.98 or $4.57 per hour. Employers can offer employees fringe benefits in lieu of a cash payment.

Using the health and welfare fringe rate to administer employee fringe benefits can ensure your employees’ health. Giving your employees access to these fringe benefit plans may make them feel valued and appreciated for their hard work and can keep employees motivated. Higher levels of employee motivation and satisfaction lead to higher productivity, increased employee retention, and other benefits to the business.

When working with the federal government, it’s essential to understand these requirements and have a proper plan in place.