Our FAQ’s

Understanding your SCA benefit options for your government contract employees should not be a challenge. We’ve compiled this FAQ to assist you in understanding your requirements, options and best path forward. Clear honest answers you need to manage your health and welfare program.

Frequently Asked Questions About Fringe Benefits & SCA Compliance

Fringe benefits are beyond an employee’s hourly base wage. In government contracting fringe benefits are required under the Service Contract Act (SCA) on a per hour basis. Benefits such as medical insurance, limited medical insurance, MEC plans, ancillary benefits, retirement, life insurance, short term disability, HRAs are all types of allowable bona-fide fringe benefits.

The Service Contract Act (SCA) is a federal law that requires government contractors performing service contracts to pay prevailing wages and provide mandated health and welfare (fringe) benefits to covered employees. Compliance with SCA requirements is critical—failure to meet fringe benefit obligations can result in penalties, back pay liabilities, and contract issues.

Bona fide fringe benefits are benefits that meet Department of Labor requirements and are provided to employees in a legitimate, compliant manner. These typically include health insurance, retirement plans, certain paid leave benefits, and other approved benefit programs. Proper documentation and administration are essential to ensure fringe benefits qualify under SCA guidelines.

It’s best for contractors to provide some type of bona-fide fringe benefit versus paying the benefit as additional cash wages to employees. Paying cash is treated as wages which is taxable to the employer and employees. Also, liability rates are calculated from total payroll making a cash payout even more expensive.

BH Benefits designs and implements bona-fide fringe benefit programs for SCA government contractors. Our approach ensures fringe dollars are allocated properly, compliance risks are reduced, and benefit programs are administered accurately allowing contractors to focus on running their business.

We offer tailored fringe benefit solutions designed specifically for government contractors. These may include compliant health and welfare benefit programs, benefits administration support, reporting assistance, and guidance on proper fringe benefit allocation based on contract requirements and workforce structure.

Yes. Many government contractors operate across multiple job sites with varying wage determinations and fringe rates. We help structure benefit solutions that accommodate complex labor classifications, multiple contracts, and geographically dispersed workforces while maintaining compliance across the board.

Traditional insurance brokers focus primarily on selling insurance products. BH Benefits specializes in fringe benefit compliance and administration for government contractors. Our services go beyond policy placement to include compliance guidance, benefit structure strategy, and ongoing support tied specifically to SCA requirements.

We work with a wide range of government contractors, including companies in food service, facilities management, janitorial services, security, maintenance, and other service-based industries subject to SCA regulations. Our solutions are designed to adapt to industry-specific labor structures and contract demands.

Yes. Fringe benefit compliance is not a one-time task. We provide ongoing support to help contractors navigate regulatory updates, workforce changes, and reporting requirements. Our goal is long-term compliance, not just initial setup.

By ensuring fringe benefits are structured correctly, documented properly, and administered consistently, we help reduce the risk of audits, penalties, and back-pay claims. Our experience with SCA requirements allows contractors to operate with greater confidence and clarity.

Contractors should look for a partner with specific experience in SCA compliance, a deep understanding of fringe benefit regulations, and a proactive approach to administration and support. The right consultant should help simplify compliance—not make it more complicated.

Getting started begins with a conversation about your contracts, workforce, and current benefit structure. From there, we assess compliance needs and recommend a fringe benefit solution tailored to your business. Our process is designed to be clear, efficient, and contractor-focused.