Two Types Of SCA Wage Determinations

Two Types of SCA Wage Determinations

  1. Two types of SCA wage determinations are issued: prevailing in the locality wage determinations (which include standard and non-standard wage determinations) and section "4(c)" wage determinations. The two types of wage determinations differ in how they are developed and issued, as required by the SCA and its regulations. See SCA §§ 2(a)(1), 2(a)(2), and 4(c), 41 U.S.C. 6703(a)(1), 6703(a)(2), and § 6707(c), and 29 C.F.R. Part 4.
  2. Prevailing in the locality wage determinations set forth monetary wage and fringe benefits determined to be prevailing for various classes of service employees in the locality after giving "due consideration" to the rates applicable to such service employees if directly hired by the Federal Government. SCA §§ 2(a)(1), 2(a)(2), and 2(a)(5) recodified at 41 U.S.C. §§ 6703(a)(1), 6703(a)(2), and § 6703(a)(5), respectively.

Wage rates prevailing in the locality. 29 C.F.R. § 4.51.

  1. In rare instances, a wage rate prevailing in a locality is based on a single rate paid to a majority (50 percent or more) of workers employed in a specific occupation in a particular locality. The SCA regulations provide that such a majority rate "is determined to prevail." 29 C.F.R. § 4.51(b). Majority rate determinations are typically union dominance wage determinations.
  2. Usually wage rates are based on measures of central tendency as provided in data collected by the Bureau of Labor Statistics, such as the Occupational Employment Statistics Survey (OES).
    1. The OES produces employment and wage estimates for over 700 occupations. These are estimates of the number of people employed in certain occupations, and estimates of the wages paid to them. Self-employed persons are not included in the estimates. These estimates are available for the nation as a whole, for individual states, and for metropolitan areas; national occupational estimates for specific industries are also available.

Fringe benefits prevailing determinations. 29 C.F.R. § 4.52.

  1. The applicable health and welfare (H&W) benefit rate is listed in each SCA wage determination.
  2. The H&W benefit rate in most SCA wage determinations is based on data from the Bureau of Labor Statistics Employment Cost Index summary of Employer Cost for Employee Compensation. The H&W rate reflects the total cost for private employers to provide all bona fide fringe benefits (not legally required) other than vacations and holidays. (Vacations and holidays are determined separately under SCA.)
    1. Effective June 1, 1997, DOL established a new methodology for determining the H&W benefit requirement applicable to most employees under the SCA. The new single rate methodology has replaced a two-level H&W rate structure that involved issuing different H&W requirements, depending on the nature and history of each contract (each rate with its own method of determining compliance with SCA requirements).
      To ease a transition from the two-tier rate structure to a new single rate methodology, there was a four-year phase-in of rate increases and the higher rate was grandfathered for continued application to contracts that succeeded those to which it had applied. Since June 1, 2004, a single H&W benefit rate has been issued. (See All Agency Memoranda Nos. and 188 and 197.)
    2. The SCA prevailing H&W benefits rate is adjusted annually, in June, based on new data. 29 C.F.R. § 4.52. (On June 17, 2012, the H&W benefit rate was increased to $3.71 per hour, and on June 18, 2013, the new H&W benefit rate was increased to $3.81 per hour.)
    3. A discussion of how to comply with these H&W benefit requirements is included in the "SCA Compliance Principles" chapter of this resource book.
  3. The paid holiday and vacation benefit requirements in most SCA wage determinations vary from locality to locality reflecting prevailing fringe benefit practices in the geographic scope of the wage determination, and the applicable requirements are stated in each wage determination.
  4. CBA - "4(c)" wage determinations require a successor contractor to apply the wage rates and fringe benefits, including accrued and prospective increases, contained in a CBA that applied to the service employees who performed on the predecessor contract in the same locality. SCA §§ 4(c) and 2 (a)(1) and (2). See also 41 U.S.C. §§ 6703(a)(1), 6703(a)(2), and § 6707(c).
    1. Wage rates and fringe benefits are based on the predecessor contractor's CBA. 29 C.F.R. §§ 4.1(b) and 4.163.
    2. For section 4(c) to apply, the predecessor contract and successor contract must involve furnishing substantially the same services in the same locality.
    3. The SCA § 4(c) requirement, as reiterated at 29 C.F.R. § 4.163(a), is that:
      1. No contractor or subcontractor under a contract which succeeds a contract subject to [the SCA] and under which substantially the same services are furnished, shall pay any service employee under such contract less than the wages and fringe benefits, including accrued wages and fringe benefits, and any prospective increases in wages and fringe benefits provided for in a collective-bargaining agreement as a result of arm's-length negotiations, to which such service employees would have been entitled if they were employed under the predecessor contract . . . .
    4. The 4(c) requirements may not apply if the collectively bargained rates were not a result of arm's-length negotiations or if the CBA rates are substantially at variance with those which prevail for services of a character similar in the locality. A later chapter of this resource book discusses administrative hearings to address issues of "substantial variance" and "arm's-length negotiations."

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