On federal contracts subject to the Service Contract Act, the prevailing health and welfare (H&W) fringe benefit rate was increased, effective July 22, 2014, to $4.02 per hour.  (One exception: The new benefit rate in Hawaii is $1.66.)

The new H&W rate applies to all invitation for bids opened, or other service contracts awarded on or after July 22, 2014.

Contracting offices are to include a new wage determination reflecting the new H&W rate to trigger the contractor’s obligation to pay the higher H&W rate. Contracting offices may make “pen and ink” changes to the current wage determinations received for contracts beginning on or after July 22, 2014 and for which the updated rates were not included.

Once the contracting authority provides a new wage determination, contractors must submit — within 30 days of the change — any claim for an equitable adjustment as a result of increased costs attributable to wage determination rate changes.