On July 16, 2024, the U.S. Department of Labor released All Agency Memorandum 246 (AAM 246) updating the 2024 Service Contract Act Health and Welfare fringe rate.
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Rate for Non-EO 13706 Contracts
AAM 246 increases the current fringe rate for non-EO 13706 contracts to $5.36 per hour.
Rate for Contracts Subject to EO 13706
The fringe rate for contracts subject to the Paid Sick Leave Executive Order is increased to $4.93 per hour.
Rates for the State of Hawaii
As in the past, the H&W rate for Hawaii takes into account the Hawaii Prepaid Health Care Act (HPHCA). The rate for employees on whose behalf the contractor is providing health care benefits under the HPHCA will therefore be $2.36 per hour for contracts not subject to EO 13706 and $1.93 for those contracts subject to the EO. For employees not receiving mandated health care benefits under the HPHCA the rates will be $5.36 and $4.93 respectively.
Contracts/Solicitations Affected
All invitations for bids opened and service contracts awarded on or after July 2, 2024, must include an updated SCA Wage Determination (WD) that comports with the regulatory health and welfare fringe benefit determination methods. Revised WDs reflecting the new benefit rates should be available at SAM.gov (www.sam.gov) and WHD (www.dol.gov/whd) websites on or around July 2, 2024. Increases in existing contracts with option years will generally be effective on the contract anniversary date. Implementing the new fringe rate typically requires a contract modification to be effective. Employers should contact the applicable contracting officer to put that modification in place.
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