SCA Health & Welfare Fringe Benefit Shortfall Calculator
For contractors/subcontractors on Service Contract Act (SCA)-covered federal service contracts. Computes whether the health & welfare (H&W) benefit value furnished to an employee meets the amount required by the contract's wage determination, per 29 CFR § 4.175.
Sources: DOL Fact Sheet #67B, "Meeting Requirements for Service Contract Act (SCA) Fringe Benefits" (29 CFR § 4.175, § 4.170-4.171) — dol.gov; current H&W rates per DOL All-Agency Memorandum No. 250 (effective 2025-07-07) — dol.gov/AAM250. This tool is a calculation aid, not a compliance certification — always verify against the specific wage determination and consult counsel/DOL guidance for a real determination.
Who needs this calculation
Any contractor or subcontractor performing on a service contract covered by the McNamara-O'Hara Service Contract Act (SCA) must furnish each covered employee health & welfare benefits worth at least the rate on the contract's wage determination — currently $5.55/hour under the standard rate, or $5.09/hour where the contract separately requires Executive Order 13706 paid sick leave. The benefit can be paid as straight cash, as employer contributions to a bona fide plan, or a mix of both, but the math to confirm the requirement is actually met trips up contractors in two specific ways: applying the 2,080-hour cap incorrectly, and annualizing a benefit plan's cost using actual hours worked instead of the fixed 2,080-hour divisor.
Why the 2,080-hour divisor matters
When a benefit is furnished as a bona fide plan rather than cash, DOL's methodology (Fact Sheet #67B) requires converting the plan's total annual cost into an hourly equivalent by dividing by a fixed 2,080-hour full-year divisor — not by however many hours the employee actually worked on the contract. Using actual hours instead of 2,080 produces a different, incorrect hourly value, which can make a genuinely-shortfalling benefit look sufficient (or vice versa). The calculator above always applies the correct divisor and shows what the incorrect calculation would have produced, so the difference is visible.