SCA WAGE DETERMINATIONS

Fringe benefits prevailing determinations. 29 CFR 4.52.

• 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.)
• The SCA prevailing H&W benefits rate is adjusted annually, in June, based on new data. 29 CFR 4.52. The annual H&W benefits rate is announced in All Agency Memoranda published on sam.gov.
• A discussion of how to comply with these H&W benefit requirements is included in the “SCA Compliance Principles” chapter.

• Wage rates and fringe benefits are based on the predecessor contractor’s CBA. 29 CFR §§ 4.1(b) and 4.163.
• For section 4(c) to apply, the predecessor contract and successor contract must involve furnishing substantially the same services in the same locality.
• The SCA § 4(c) requirement, as reiterated at 29 CFR 4.163(a), is that:
  • 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 . . . .
  • 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.”

  Application of “4(c)” Wage Determinations

  • The successor contractor is obligated to pay its employees the wages and fringe benefits in the predecessor’s CBA that they would have been entitled to if they were employed by the predecessor contractor. On a contract subject to annual fiscal appropriations of Congress, this obligation applies independently to the base year of a multi-year contract and each subsequent option. On other contracts, the obligation is for up to two years. (In the section below, concerning “Obtaining SCA Wage Determinations,” see the discussion of " Multi-Year Procurement.”)
  • This obligation exists whether or not the employees of the predecessor contractor are hired by the successor contractor. Thus, even if a successor contractor does not hire any of the predecessor contractor’s employees, the successor contractor is nevertheless required to pay service employees employed on the contract the CBA rates established in the predecessor contractor’s CBA.
  • The obligation of the successor contractor is limited to the wage and benefits requirements of the predecessor contractor’s CBA and does not extend to other items such as seniority, grievance procedures, work rules, overtime, etc.
    • Any interpretation of the wage and fringe benefit provisions of the CBA where its provisions are unclear must be based on the intent of the parties signatory to the CBA, provided that such interpretation does not violate any law.
    • The self-executing application of section 4(c) may be limited if notice of the terms and conditions of a new or changed collective bargaining agreement is not received within the timeframes and under the circumstances specified in 29 CFR 4.1b(b)(1) and (2).
      • These limitations apply only if the contracting officer has given both the incumbent (predecessor) contractor and the employees’ collective bargaining representative written notification at least 30 days in advance of all applicable Estimated procurement dates, including bid solicitation, bid opening, date of award, commencement of negotiations, receipt of proposals, or the commencement date of a contract resulting from a negotiation, option or extension, as the case may be.

      The limitation on the self-executing application of the 4(c) provision will not apply, i.e. the 4(c) requirements will apply, if the contracting agency has given such notification, and the agency receives notice of the terms of a new or changed CBA which was consummated during the period of performance of the predecessor contract and which was applicable to the performance of work under the predecessor contract —

      The CBA must be received by the contracting officer (Not DOL) within specified timeframes.

      If the CBA is not received by the contracting officer within these timeframes, then the CBA may not apply.

      SCA DIRECTORY OF OCCUPATIONS

      Overview of the SCA Directory of Occupations

      • Since April 1985, the Wage and Hour Division has published standard occupational titles and definitions in the SCA Directory of Occupations. This is a key resource to be utilized in obtaining and applying SCA wage determinations. The WHD home page (http://www.dol.gov/agencies/whd) and the sam.gov website “Library” have links to the Directory.
      • For any SCA-covered contract exceeding $2,500 the contracting agency must either obtain a wage determination by using the “e98” process or use the sam.gov “Selecting SCA WDs” process for obtaining SCA wage determinations. The e98 process requires the contracting agency to specify the occupational titles of workers to be employed on the contract. Use of the Directory allows the contractor, federal procurement agency, and WHD staff to associate standard job descriptions with these titles.
      • Each year, wage determinations are applied to approximately 60,000 government service contracts covered under the SCA. Total annual federal government service contracting has been estimated in the billions of dollars. These SCA-covered contracts involve the performance of a wide range of services, including such diverse activities as aerial spraying, barber and beauty shop services, computer services, electronic equipment maintenance, furniture repair, surveying and mapping, trash removal, and warehousing. Employees in a wide spectrum of occupations are needed to perform these services.
      • A variety of data sources are utilized in the development of SCA prevailing wage determinations, including Bureau of Labor Statistics survey data. The Directory is now in its fifth edition, which was published in 2006.
      • Since payroll titles and work assignments vary among establishments and geographic areas, such descriptions are useful as standards in classifying workers by occupation so that wage rates representing specific job content can be established. The Directory makes available uniform occupational information providing composites of similar jobs performed in many geographic areas all over the country. The Directory contains occupational titles and descriptions and a classification structure under which the occupations are arranged according to their interrelationships.

      Federal Grade Equivalency (FGE) Information in the Directory

      • The Fifth Edition of the Directory provides information on the federal civil service grade levels most likely to correspond to the occupations included.
        • This information reveals the grade levels that would be assigned to such occupations, if the work was being performed by a federal employee.
        • For WHD staff, such information is especially useful in connection with developing prevailing wage determinations for occupations for which no survey data are available or for which survey data are not available for various levels within a job family.
        • Contractors and federal procurement agency staff may utilize federal grade equivalency (FGE) data for guidance in developing wage rate proposals for occupations to be conformed. (See the “SCA Conformance Process” chapter of this resource book for further information on FGE use for conformances.)
        • “GS” (General Schedule) refers to grade rates utilized for non-supervisory appropriated fund “white-collar” positions;
        • “WG” (Wage Grade) refers to grade rates utilized for non-supervisory appropriated fund “blue-collar” positions;
        • “AS” refers to non-supervisory non-appropriated fund Administrative Services rates; and
        • “NA” refers to some non-appropriated fund classifications.

        Using the SCA Directory of Occupations

        • The SCA Directory of Occupations provides the occupational titles and describes the scope of duties for each occupation listed. It is available on the sam.gov website at http://www.dol.gov/agencies/whd/government-contracts/service-contracts. In addition to the Directory, links are provided for the:
          • “Table of Contents,” which provides a numerical listing of occupational categories and titles, “Federal Grade Equivalencies,” and location of each in the Directory by page; and the
          • “Occupational Index,” which provides an alphabetical listing of occupational titles.

          01000	Administrative Support and Clerical Occupations
          05000	Automotive Services Occupations
          06000	Automotive Service (Retail) Occupations
          07000	Food Preparation and Service Occupations
          08000	Forestry and Logging Occupations
          09000	Furniture Maintenance and Repair Occupations
          11000	General Services and Support Occupations
          12000	Health Occupations
          13000	Information and Arts Occupations
          14000	Information Technology Occupations
          15000	Instructional Occupations
          16000	Laundry, Dry Cleaning, Pressing and Related Occupations
          19000	Machine Tool Operation and Repair Occupations
          21000	Materials Handling and Packing Occupations
          23000	Mechanics and Maintenance and Repair Occupations
          24000	Personal Needs Occupations
          25000	Plant and System Operation Occupations
          27000	Protective Service Occupations
          28000	Recreational Occupations
          29000	Stevedoring/Longshoremen Occupational Services
          30000	Technical Occupations
          31000	Transportation/Mobile Equipment Operation Occupations
          47000	Water Transportation Occupations
          91000	Wildlife Management and Animal Care Occupations
          99000	Miscellaneous Occupations

          • Each occupational title is identified by a five digit code.
          • The first two digits of each occupational code identify the broad category of occupations to which each specific occupation belongs. For example, since the code for the broad category of Administrative Support is 01000, each specific occupation within this category begins with the first two digits 01, such as, Court Reporter, 01040.
          • Within each broad category, occupations are listed in alphabetical order. Therefore, the third and fourth digit of each occupational code follow that alphabetical progression. For example, the code for Rental Clerk is 01290, while the code for Scheduler, Maintenance is 01300.
          • Occupations that reflect distinct levels in “job families” are prefaced by “base” statements that describe occupational content common to each level.
          • The levels of difficulty are denoted by Roman numerals placed after the title, with the numeral “I” being the least difficult, and each numeral thereafter indicating a more difficult level. In general, the higher the grade level, the greater the level of complexity and compensation. The codes for each level, such as General Clerk I, General Clerk II, and General Clerk III, utilize the fifth digit to differentiate one from the other. For example, General Clerk I, 01111; General Clerk II, 01112; and General Clerk III, 01113.
          • Each broad category is defined so that homogeneous groupings can be delineated. The titles represent those most commonly used in the wage determination process. The descriptions represent composites of jobs found in a number of establishments and may differ from those in use in individual establishments or those prepared for other purposes.
          • Some of these definitions have been adjusted to meet SCA operations requirements. Immediately following the title, there may be one or more titles in parentheses. These are alternative titles for the titles with which they are shown. They are synonymous titles and appear in the alphabetical index in lower case.

          Job Description and Federal Grade Equivalent Must Be Provided if the Directory Does Not Include a Class for the Given Job Duties

          • Contracting agency officials who are unable to locate a given title or description, or who cannot match specific job duties with a corresponding occupational description in the Directory, should submit an appropriate occupational title and description with an “e98” request.
            • This procedure will assist the WHD Branch of Service Contract Wage Determinations in issuing wage determinations for occupations in response to “e98” requests.
            • Such information also provides the basis for future updates and revisions of the Directory.
            • Note that wage determinations will not be issued for occupational titles requested if the applicable job duties are performed by an occupational classification contained in the SCA Directory and listed in the wage determination.

            OBTAINING SCA WAGE DETERMINATIONS

            Responsibility of Contracting Agency to Obtain SCA Wage Determinations

            • Contracting agencies have the initial responsibility for determining whether a proposed contract may be subject to the SCA and, if the proposed contract is covered by the SCA and exceeds $2,500, to obtain and incorporate the appropriate wage determination(s) in covered contracts.

            Obtaining SCA Wage Determinations – Two Methods

            • SCA wage determinations can now be obtained by the contracting agency in two different ways. The contracting agency has total discretion as to which method to follow. See Final Rule “Service Contract Act Wage Determination Online Request Process” published in the Federal Register on August 26, 2005, 70 Fed. Reg. 50888-50899).
            • First Method – “e98” process pursuant to 29 CFR 4.4(b).
              • For each proposed contract exceeding $2,500, the contracting agency may request SCA wage determinations from the WHD by electronically submitting an “e98” that describes the proposed contract and occupations expected to be employed on the contract. An “e98” must be submitted for each anticipated contract. The wage determination(s) issued in response to each request must be incorporated into the bid specifications and the resultant contract.
              • The “e98” requires the requesting agency official to specify the:
                • Relevant procurement dates.
                • County and state where the work will be performed.
                • Type of services to be performed under the contract.
                • Occupational classes and the number of service employees who will perform work on the contract. Occupational titles and corresponding code numbers found in the SCA Directory of Occupations should be used where applicable. For occupations not contained in the Directory, an appropriate job title and job description must be provided.
                • Hourly rates or federal grade levels that would be paid if such workers were federal direct hires.
                • Information on the incumbent contract, i.e., incumbent contractor, previous wage determination, and any CBA that may apply.
                • A correct e-mail address, as most responses will be provided via e-mail.
                • Contracting agencies may use the sam.gov website to select the proper wage determination for a proposed contract. The sam.gov website provides assistance to the contracting agency in the selection of the correct wage determination. An overview of this process can be found on the sam.gov website.
                • The contracting agency is fully responsible for selecting the correct wage determination. If DOL determines that the correct SCA wage determination was not included in a covered contract, the contracting agency shall amend the contract within 30 days of DOL notice to incorporate the correct wage determination as determined by the WHD. 29 CFR 4.5(c)(2).
                • If an applicable prevailing wage determination is not available on the sam.gov website, the contracting agency must submit an “e98.”
                • The contracting agency shall monitor the sam.gov website to determine whether the applicable wage determination has been revised. Revisions published on the sam.gov website or otherwise communicated to the contracting officer are applicable and to be included in the contract under the following time frames:
                  • For advertised procurement – 10 days before the date set for bid opening, unless the contracting agency determines there is not reasonable time to notify bidders of the revision within 10 days;
                  • For negotiated procurement – before the award date if start of performance is within 30 days, or 10 days before commencement of the contract if start of performance is beyond 30 days.

                  Multi-Year Procurement

                  • In the case of multi-year contracts subject to annual fiscal appropriations of Congress, the contracting agency must obtain a new wage determination each year for use on the anniversary date of the contract. 29 CFR §§ 4.4(a)(1) and 4.145(a).
                  • If the multi-year contract is not subject to annual fiscal appropriations, the contracting agency must obtain a new wage determination and apply it to the contract at least every two years, on the biennial anniversary date of the contract. SCA§ 4(d), recodified at 41 USC § 6707(d), and 29 CFR 4.145(b).

                  Two-Step Procurements

                  • When the place of performance of a contract is unknown at the time of solicitation, the contracting agency should follow the two-step procedure, as required by 29 CFR 4.4(a)(3):
                  • In the first step, the contracting agency will issue an initial solicitation with no wage determination, from which it identifies all interested bidders and their possible places of performance.
                  • In the second step, the contracting agency will obtain separate wage determination(s) for the various localit(ies) identified in the first step, to be incorporated in the solicitation prior to the submission of final bids. The appropriate wage determination(s) applicable to the geographic locations identified by the successful bidder must be incorporated in the resultant contract and must be observed, regardless of whether the contractor subsequently changes the place(s) of contract performances.

                  CONTENTS OF AN SCA WAGE DETERMINATION

                  • Each wage determination developed and issued by the WHD contains the “Register of Wage Determinations” which is the official documentation of issuance by DOL.
                  • Standard prevailing wage determinations are most frequently issued and applied to SCA-covered contracts. These wage determinations contain the following types of information:
                    • Wage Determination Number – is generally eight digits, that start with the year a new edition of the SCA Directory of Occupations is issued. For example, 2005-2xxx or 2005-3xxx (previously issued using 1994-2xxx or 1994-3xxx). Note: Two identical wage determinations, except with respect to fringe benefits, are issued for each locality.
                      • Odd-number wage determinations, when incorporated in a covered contract, require compliance with the health and welfare fringe benefits on a “fixed cost” per employee basis. These apply most frequently.
                      • Even-number wage determinations, when incorporated in a covered contract, require compliance with the health and welfare fringe benefits on an “average cost” basis. Since June 1997, the WHD has issued such wage determinations only for successor contracts. Thus, agencies should use even-numbered wage determinations only when a bid solicitation (or RFP) succeeds a contract that previously contained the “average cost” fringe benefit compliance requirement.
                      • See the “SCA Compliance Principles” chapter of this resource book for information on how to comply with each of these fringe benefit requirements.
                      • The wage rates and fringe benefits listed in “prevailing in the locality” wage determinations are based on the wages and fringe benefits determined to prevail in the locality covered by the wage determination. The best available information is used to determine what is prevailing, while giving due consideration to federal wage rates that would apply if the workers were federal employees.
                      • The footnote for the “Fixed cost” per employee health and welfare fringe benefit requirement is a single line specifying hourly, weekly, and monthly contribution amounts. For example: HEALTH & WELFARE: $4.02 per hour or $160.80 per week or $696.79 per month.
                      • The footnote for the “Average cost” health and welfare fringe benefit requirement is a brief paragraph listing types of benefits and an hourly contribution amount. For example: HEALTH & WELFARE: Life, accident, and health insurance plans, sick leave, pension plans, civic and personal leave, severance pay, and savings and thrift plans. Minimum employer contributions must cost an average of $4.02 per hour computed on the basis of all hours worked by service employees employed on the contract.
                      • Specific occupational footnotes;
                      • Hazardous Pay Differential;
                      • Uniform Allowance;
                      • SCA Directory, which edition applies and how to obtain a copy; and,
                      • Request for Authorization of Additional Classification and Wage Rate (SF 1444)
                      • Non-standard wage determinations are issued for specific contracts or types of contracts. They may be based on different data sources that may be industry specific and they often cover different geographic areas that may be either narrower or broader that the standard wage determinations for the area.
                        • For example, a non-standard wage determination may apply only to a specific contract or federal facility rather than the broader geographic area listed on the standard wage determination. Conversely, the non- standard wage determination may apply statewide or regionwide to particular classification(s).
                        • These wage determinations are “short form,” i.e., they identify the specific contract, locality, the parties signatory to the CBA, and a brief statement regarding the application of section 4(c) to the contract.
                        • If the wage determination is issued by DOL, it will include an eight digit wage determination number starting with the year of first issuance (e.g., 2007-0248 (Revision No. 1)). If the “successorship” wage determination is issued by the contracting agency via the sam.gov website, it will include the letters “CBA” in the wage determination number, and the WHD will not have a copy of it on file.
                        • The wage and fringe benefits required under “4(c)” CBA “successorship” wage determinations are based on the wage rates and fringe benefits, including any accrued and prospective increases, contained in a predecessor or incumbent contractor’s CBA.
                        • See SCA § 4(c), 41 USC § 6707(c), and 29 CFR §§ 4.1(b) and 4.163.

                        WAGE DETERMINATION SAMPLE MATERIALS

                        Excerpts from WD Nos. 2005-2521 & 2005-2522

                        (1ST page and last 3 pages of each, showing footnotes; H&W different )

                        WD No. 95-0819 (Rev.-32)

                        (An example of a WD for non-standard classifications)