Benefits Insights, Spring 2016
The U.S. Department of Labor’s Wage and Hour Division (WHD) issued All Agency Memorandum No. 218 describing the publication of new area-wide Service Contract Act (SCA) wage determinations (WDs). These area-wide SCA WDs will be based on new primary source data that will generally cover smaller geographic areas and reflect a transitional methodology for determining prevailing wage rates.
Previously, the primary data source for prevailing wage rates under the SCA came from the Locality Pay Survey (LPS). However, due to funding restrictions, LPS is no longer available. As a result, WHD adopted the Occupational Employment Statistics (OES) as the new primary data source.
One of the main differences with the OES survey is that it produces wage data for a significantly larger number of localities and occupations. The OES survey also generates separate wage data for metropolitan statistical areas and non-metropolitan statistical areas.
While the WHD has already started publishing area-wide SCA WDs based on the OES survey, transitioning to the new methodology is expected to affect WDs in two significant ways. First, WHD will begin to issue locality-based wage determinations based on the OES survey’s different geographic areas. Second, WDs will incorporate new rates in a phased manner to minimize disruption.
In addition to adopting a new primary data source for determining SCA prevailing wage rates, WHD also updated the SCA Directory of Occupations to include updated occupational definitions for existing SCA classifications as well as definitions for 27 new classifications found on area-wide WDs that will be issued under WHD’s new methodology.
Implementation of the new methodology will be gradual because an immediate transition to OES geographic localities and wage rates could in some instances have a disruptive impact on employees, employers, and the federal procurement process. To assist in identifying which new SCA WDs correspond to a locality or WD used under the prior methodology, the WHD has developed a “crosswalk,” which is available on www.wdol.gov.
A copy of the All Agency Memorandum No. 218 can be found at