Therefore any adjustment to health welfare fringe

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Therefore, any adjustment to health & welfare fringe benefit requirements for paid time-off hours is not allowable. 12. Worker’s Compensation Insurance. There are issues to be alert to on requests for adjustment to the ‘accompanying costs’ on worker’s compensation insurance premiums. First, is that the worker’s compensation premium increases that are allowed are only on those costs that ‘accompany’ the SCA wage determination mandated increase . A general increase to a contractor’s worker’s compensation rate is not an entitlement under the clause. For example, if the SCA wage rate increase amounts by $1.00 per man-hour; then not only is the contractor entitled to the $1.00 per man-hour, but they are also entitled to the additional worker’s compensation insurance costs resulting from that additional $1.00 per man-hour payment. However, if the contractor’s worker’s compensation insurance premium has increase from 3% to 4%, the contractor is not entitled to the additional 1% increase on the entire wage of all its ‘service employees’. That cost is simply a risk accepted by the contractor within a fixed price contract environment. Also, be alert to the % or the “per $100 rate” used by the contractor. Just like car insurance, worker’s compensation insurance rates and premiums vary depending on factors such as the nature of the work classification(s) (higher rates for more hazardous work) and the contractor’s “experience factor” (the number of claims filed against the contractor’s policy). Therefore, no exact % can be provided that applies to all employers. However, if the % appears to be high compared to similar contractors or the particular contractor’s previous information, don’t hesitate to ask for verifiable documentation of the rate actually paid. This information can either be obtained from the state agency which oversees workers compensation programs or from the contractor’s workers compensation insurance provider. 13. Overtime Premium.
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SCA price adjustment request for overtime premium should be denied , absent special contract circumstances. Overtime premium is not required by the SCA. This is also consistent with the FAR policy on overtime found at 22.103-2 which discourages overtime work. This is particularly true since the contractor can control such costs by well-managed scheduling of workers and its hiring practices. Therefore, any overtime premium incurred by the contractor on an SCA wage rate increase, must likewise be born by the contractor and is not permissible under the clause. If, for example, an SCA rate increase causes the contractor to incur additional costs of $1.00 per man-hour; the price adjustment to the contractor would be limited to that amount and the accompanying costs discussed above. If the contractor ask for $1.50 per man-hour (time and one half) for overtime hours, the $.50 overtime premium portion of the requests is not allowable. Extenuating contract circumstances where
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