Service Contract Act & Davis-Bacon Act

The Service Contract Act and Davis-Bacon Act require minimum wages and benefits paid to all hourly employees charging time directly to a federal service contract as part of a total compensation plan. These amounts are subject to audit by the Department of Labor, Defense Contract Audit Agency, or other agency audit procedures. Failure to prove compliance may subject the contractor to debarment from all government contracts for up to three years.

Service Contract Act requires minimum wages paid per labor category as defined in the Directory of Occupations and listed as minimum wages per labor category on the Area Wage Determination incorporated into each contract. The wages are mandatory minimums paid employees for every hour worked on the contract as defined by The Act, both full-time and part-time.

Vacation, Holiday and other elements of total compensation (differential pay, uniforms, etc.) are listed as separate line items on the Area Wage Determination, which you must account for separately and apply to full-time and part-time employees.

Davis-Bacon Act requirements differ from the Service Contract Act in certain areas, such as, weekly-certified payroll and minimum fringe-dollar amounts list on the Area Wage Determination by labor category, which may range from zero to twenty plus dollars per hour. This complicates the fringe-dollar management, administration and accounting beyond the Service Contract Act. You must track every time segment worked by each employee by type of work, Service Contract Act and Davis-Bacon Act and labor category on every separate contract subject to geographic location in order to report pay and benefits properly.

Service Contract Act and Davis-Bacon Act contracts require “fringe dollars” to provide employee benefits. These fringe dollars are defined by prevailing wage determinations and the benefits costs are charged directly to the contract. By using the SCA Solutions team as your company’s employee benefits administrator, you will gain access to a full-service benefits administrator that provides your employees with the most cost effective and comprehensive employee benefits package available in the industry. Our team provides a single source solution for all of your government contract fringe benefit product administration, we will guarantee fringe dollar compliance using extensive services and comprehensive employee benefits packages while providing your company and its employees with fringe accounting reports defining how the fringe dollars were allocated and spent.

We founded Stevenson Contract Advisors solely for government contractors as the single source solution tailored to ensure that every client gets the most out of the contracts they fight so hard to win.  SCA Solutions provides business solutions to contractors by providing business development, total compensation and fringe benefit answers. Let our team of experts help you be more Competitive, Compliant and Profitable!