Hunton Employment & Labor Perspectives

Contracts issued subject to the Service Contract Act (“SCA”—also known as the Service Contract Labor Standards) require contractors and subcontractors to, among other things, pay an hourly health and welfare benefit specified in an applicable Wage Determination (“WD”). The Department of Labor (“DOL”) issues an updated health and welfare benefit amount annually, which is subsequently incorporated into revised WDs.

On July 1, 2019, the Department of Labor (“DOL”) issued an opinion letter regarding permissible rounding practices under the Service Contract Act (“SCA”).  Although the SCA governs government contractors, the DOL’s guidance is nevertheless helpful to retailers because the SCA incorporates Fair Labor Standards Act (“FLSA”) rounding principles, which are applicable to them.