McNamara O’Hara Service Contract Act (SCA) Solutions

 

McNamara-O’Hara Service Contract Act (SCA) Overview

 

Placed in law, January 1966, and amended in 1972 and 1976, The McNamara-O’Hara Service Contract Act (SCA) requires contractors and subcontractors performing services on federal contracts to pay their service employees no less than the wage and fringe benefit rates found in the locality. 

 

Sample Industries

·   Security Guards                     · Janitorial

·   Temp Staffing                         · Grounds Maintenance

·   US Mail Haulers                    · Moving

·   Healthcare Industry              · Warehousing

·   Facility Maintenance             · Food Service

·   Transportation                       · Remediation

 

How Richman Knoll Can Help You

 

Effective June 17, 2011, the  Current Health & Welfare (Fringe) rate is $3.59 per hour.

 

The Problem – Contractors will often pay some or all a portion of the fringe benefit portion of the prevailing wage as cash wages rather than as benefits because they feel it is the easiest way to comply with the regulation.

 

The Most Costly Method - By paying the fringe benefit as wages means it is subject to payroll costs such as FICA, FUTA, State unemployment taxes, Workers compensation and general liability premiums.

 

The Solution - Why pay unnecessary payroll costs? Allocating the entire fringe benefit portion towards a “bona fide fringe” benefit fund plan provides valuable benefits for your employees and eliminates the payroll tax burden.

 

Be more competitive on bids.

Keep a larger share of the profits you are earning.

Let’s Compare

Fringe Paid as Wages Vs. Fringe Paid as Benefits

Fringe Paid in Cash

Fringe Paid in Benefits

 Cash Wages

$21.59 per hour paid

$18.00 per hour paid

 Fringe Paid as  H&W Benefit

$0.00

$3.59 per hour paid

 Payroll Burden

$3.67 per hour paid

$3.06 per hour paid

Assumed 17% FICA, FUTA, SUTA, WC
 Total Bid Cost   Per Hour Paid

$25.26

$24.65

Our single source solution provides your employees with optimal benefits packages, while you save administration time and have more money pass through to your bottom line..
 Savings Per Hour  Per Employee

$0.00

$0.61

 Annual Savings   Per Employee

$0.00

SAVE $1,269

Long-term Savings

Over a 5 year contract with

100 employees =

$634,400.00