SCA Health & Welfare shortfall, per employee and across the determination

$33,033.60 is what a US federal service contractor owes forty-five employees on a single wage determination, after crediting Health & Welfare at $5.55 an hour through a year in which the rate their determination carried was $5.92.

Nobody in that payroll department did anything careless. The Wage and Hour Division raised the prevailing SCA Health & Welfare fringe from $5.55 to $5.92 an hour effective 10 August 2026, and the EO 13706 rate from $5.09 to $5.42. Ask any chatbot today and a good number of them still answer $5.55, because that was true for most of the text they were trained on. That is the first way this goes wrong.

The second way is worse, because it also catches people who know the new number. The $5.92 rate does not switch on for you on 10 August 2026. It binds when the updated wage determination is actually incorporated into your contract: at a new award, a modification, an option year exercise, or an extension. So two contractors reading the same DOL memo on the same morning owe two different rates, and the thing that decides which is the date on the wage determination in their file - not today's date. A tool that applies the current rate from today's date will tell one of them to overpay and the other to underpay, and both answers cost money.

Then there is the hours question, which is where the arithmetic actually lives. On a fixed-rate determination - the odd-numbered ones, which is most of them now that DOL is phasing the others out - H&W is owed on all hours *paid*, up to 40 in a week and 2,080 in a year, per employee. Paid means paid: holiday, vacation and sick hours count. Payroll systems are built to report hours *worked*, and hours worked is the number that ends up in the fringe calculation. In the example above that is 1,840 hours worked against 1,984 H&W-eligible hours, once 240 hours of paid leave are added and 96 hours paid above 40 in a week are taken back out. A hundred and forty-four hours, one employee, on a line nobody prints.

The cap runs the other way too. Hours paid above 40 in a week do not earn H&W on a fixed-rate determination, and neither does anything past 2,080 in the year. Contractors who apply the fringe to every paid hour are giving away money they cannot bill and cannot get back, and it never shows up as an error because no one complains about being overpaid.

On an average-cost determination - the even-numbered ones - the rule inverts: H&W is computed on hours *worked*, with no weekly or annual cap, across all service employees collectively rather than one at a time. Same statute, same fringe, opposite base. Using the wrong one is not a rounding difference.

Put those together and the per-employee gap in the example is $734.08. That is $0.37 an hour, which is exactly why it survives review: it is too small to look like a mistake on any single payslip. Multiplied by the forty-five people on that determination, it is $33,033.60, and that is the shape of the number a Wage and Hour investigator arrives at - because they multiply, and payroll reviews one line at a time.

The SCA H&W Shortfall Check is a browser extension and a free web page that does exactly this calculation. You pick the rate your wage determination carries, from all six current and prior values rather than whichever one is current today; you pick fixed-rate or average-cost; you enter hours worked, paid leave hours, the paid hours above 40 in a week from your weekly detail, what you actually credit per eligible hour, and the headcount on that determination. It returns the eligible hours, the hours the caps strip out, the H&W required, the H&W credited, the shortfall per employee, and the exposure across the determination.

All of that is free, with no key, no limit and no watermark, in the popup and on the web page. The full version, $60 once, adds a .csv export of the whole run - every input and every output, one row each - so the figure you hand the contracting officer sits in the audit file with its inputs attached, instead of living in a screenshot and a memory. A compliance analyst on a federal contract bills between $85 and $340 an hour fully burdened at 2026 federal staffing rates.

One more thing worth knowing while you are in this file. If the H&W increase did land on you through an option exercise or a modification, FAR 52.222-43 is the clause that lets you claim the increase back from the government rather than absorb it into your margin. The shortfall calculation is what you attach to it.