On June 27, 2023, the Department of Labor announced this year’s rate for prevailing health and welfare benefits issued under the Service Contract Act. The 2023 Service Contract Act fringe rate arrives during a period of high inflation and high competition in the government contracting market! Since many contractors build their long-term strategies around the annual fringe rate, it’s no surprise that the annual announcement is highly anticipated.

The 2023 Service Contract Act Fringe Rate: What has changed?

We are pleased to report that health and welfare fringe benefit rates for 2023 were all increases from their previous rates in 2022. Here are the following fringe benefit updates for 2023, as reflected in All Agency Memorandum No. 243:

• $4.98 per hour (increase from $4.80)
• $4.57 per hour for EO 13706 contracts (increase from $4.41)
• $2.15 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees
• $1.74 per hour for Hawaii Prepaid Healthcare Act (HPHCA) employees on EO 13706 contracts

Everything Else You Need to Know About the 2023 SCA Fringe Rate

The Wage and Hour Division will publish the updated wage determinations, reflecting the 2023 Service Contract Act fringe rate, on the SAM.gov and Wage and Hour Division websites where they will be accessible for all contractors. For all invitations for bids and awarded service contracts that occur on or after the effective date of June 27, 2023, this updated SCA Wage Determination must be included in compliance with all regulatory health and welfare fringe benefit determination methods. Contractors are required to provide the health and welfare rate from the Wage Determination that is applicable on the anniversary date of a multiple-year contract or at the beginning of the contract option period.

Remember, for all contractor compliance concerns and fringe benefit solutions. Boon is here to help!

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