On July 25, the Department of Labor issued an all agency memorandum announcing an increase in the fringe rate contribution required under the Service Contract Act (SCA). The rate will increase from $4.27 to $4.41 per hour, effective August 1, 2017. The SCA sets prevailing wages and benefits that federal contractors who provide certain services to the federal government must pay to their employees.
The memorandum also reminds federal contractors of their obligations under Executive Order 13706, which requires covered contractors to provide employees with up to 56 hours of paid sick leave annually. Executive Order 13706 applies to new contracts with the federal government arising out of solicitations issued on or after January 1, 2017. Sick leave paid to comply with Executive Order 13706 may not be credited to satisfy contractor obligations under the SCA.