Welcome to Part 31, the prevailing wage newsletter that helps federal SCA contractors protect their margins and stay compliant on post-award operations.

This week: WHD recovered 90% more in SCA back wages last year, on fewer cases. That’s not a typo. The ARB also reminded everyone that writing a check doesn’t keep you off the debarment list. And a hard DEI clause deadline lands in 11 days. Let’s get into it.

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In this issue:

⚖️ WHD back-wage numbers hit 90% year-over-year spike

🚨 ARB affirms debarment without willful intent

💊 ACA premiums are up 18–26%, does your fringe still work?

📖 Know the reg: FAR 52.222-43

WHD recovered 90% more in back wages last year, with fewer cases

FY2025 SCA enforcement data is final. The number: $26.75M in back wages recovered from SCA contractors, up from $14.1M in FY2024. But here’s the part that should get your attention: WHD opened fewer cases (641 vs. 765) and found violations in fewer of them (445 vs. 548). The per-case recovery nearly doubled.

Fewer audits. Bigger hits. That’s not an agency losing interest. That’s an agency getting selective.

Why it matters

• WHD is running a quality-over-quantity enforcement strategy. Fewer cases, higher dollar recoveries. If you think declining case volume means less risk, the data says you’re wrong.

• WHD Administrator Andrew Rogers confirmed at the Capital Summit that the agency is running two tracks: fast resolution on routine complaints, targeted pursuit of “egregious” violations. If you have gaps, you’re now easier to find, not harder.

• Total WHD back-wage recovery across all laws hit $259M in FY2025, the highest since FY2019. The enforcement appetite is structural. (DOL WHD Enforcement Data)

What to do now

1. Pull your SCA compliance posture by contract. Unimplemented WD modifications are the most common trigger for large back-wage recoveries. If there’s a contract mod you haven’t fully implemented, that’s your exposure.

2. Map your workforce classification. Anyone treated as an independent contractor on a covered contract is direct back-wage exposure under DOL’s pending independent contractor NPRM.

3. Run a fringe gap analysis across your active portfolio. If you’re within $0.50/hr of the H&W floor on any contract, close it before an audit finds it for you.

4. Review your certified payroll records. WHD increasingly requests these in targeted investigations. You want to know what’s in them before they do.

In Brief

ENFORCEMENT

The ARB just confirmed: paying back wages does not save you from debarment

A contractor paid every dollar of back wages and fringe benefits WHD asked for. No willful intent. Full cooperation. The ARB debarred them for three years anyway.

In Administrator, WHD v. Seven Hills, Inc. (ARB No. 2024-0005, decided January 30, 2026), the violation was straightforward: a contract modification incorporated a new wage determination, and the contractor didn’t implement it promptly. Nearly a decade of administrative proceedings later, the ARB’s holdings are worth reading slowly:

Why it matters:

• Debarment does not require intentional misconduct. “Culpable neglect,” meaning you should have known, is enough.

• Paying back wages resolves the monetary liability. It does not resolve the compliance failure. These are two different problems.

• Debarment exposure outlasts the corrected violation. There is no statute of limitations on the underlying conduct in administrative proceedings.

Bottom line: every contract modification that incorporates a new WD is a compliance event, not administrative mail. Assign it. Track it. Implement it. (ARB Decision) | (CWC Analysis)

2. REGULATORY

DEI clause hard deadline: April 25, 11 days out

By April 25, agencies must insert the mandatory DEI compliance clause into all new and modified contracts. The EO defines “racially discriminatory DEI activities” broadly: any disparate treatment based on race or ethnicity in hiring, promotions, vendor agreements, program participation (mentoring programs, leadership tracks, ERGs), or the allocation of an entity’s resources. That last bucket is wide open, and it’s the one that will catch people off guard.

Here’s the part that changes the math: compliance is deemed “material to the Government’s payment decisions” under the False Claims Act. Every invoice you submit after April 25 is also an implicit DEI certification.

Why it matters:

• The definition covers more than employment decisions. Mentorship programs with race-based eligibility, supplier diversity set-asides, and resource allocation tied to demographics all fall within scope.

• This isn’t just a contract clause. It’s FCA exposure on every payment request. The treble-damage math applies.

• Subcontractor flow-down obligations are included. You’re responsible for “known or reasonably knowable” noncompliance down the chain. Your subs’ DEI problem becomes your FCA problem.

• FAR Council interim guidance isn’t due until May 25. The clause deadline arrives a month before the implementation guidance. Don’t wait for the guidance to start your review.

Conduct a privileged internal audit of DEI policies, training programs, and vendor agreements now. PilieroMazza’s April 22 webinar is the most targeted guidance session before the deadline. (PilieroMazza Client Alert) | (Fox Rothschild FCA Analysis)

3. FRINGE & BENEFITS

ACA premiums spiked. If you’re using marketplace plans to deliver SCA fringe, check your math.

The setup: SCA contractors owe a Health & Welfare fringe benefit on every covered contract. Many satisfy that obligation by steering employees toward ACA marketplace plans, sometimes paying part of the premium, sometimes just pointing employees to healthcare.gov and calling it done.

The problem: enhanced ACA premium tax credits expired December 31, 2025. Congress hasn’t extended them. Marketplace premiums jumped 18–26% in 2026. That means your employees’ out-of-pocket costs went up significantly, and the fringe delivery mechanism you built your bids around may no longer hold.

These are two separate compliance exposures, and rising premiums can trigger both at once:

Why it matters:

• SCA fringe gap risk. Your H&W obligation is set by the wage determination on each contract. If you’re relying on marketplace plans to deliver that fringe and the employee’s actual cost now exceeds what you’re contributing, you have a gap. WHD doesn’t care how you structure it. They care whether the employee received the full H&W benefit.

• ACA affordability risk. Separately, the ACA employer mandate requires that coverage cost employees no more than 9.96% of household income (2026 threshold). The safe harbor monthly cap is $129.89. If your employees’ premiums now exceed that, you may owe ACA penalty taxes on top of any SCA back-wage exposure.

• ICHRA as an alternative. Individual Coverage HRAs let you set a fixed dollar contribution per employee class and let them pick their own plan. It’s the cleanest way to lock in your fringe cost and stay compliant on both the SCA and ACA side. One catch for 2026: ICHRA and Section 125 cafeteria plans cannot be combined. That integration was left out of the final budget legislation.

If you bid contracts assuming 2025 premium levels, remodel now. Don’t wait for option exercise. (AJMC) | (CBIZ)

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Know the Reg

FAR 52.222-43

Fair Labor Standards Act and Service Contract Labor Standards — Price adjustment (multiple year and option contracts)

This is the clause that lets you recover SCA wage and fringe cost increases on multi-year contracts and option renewals. It’s also one of the most underused tools in a contractor’s toolkit.

FAR 52.222-43 entitles you to a price adjustment for mandatory wage determination increases, but only the portion that’s truly mandatory (new WD rates or statutory minimums), not voluntary fringe enhancements or market-driven labor cost bumps.

Two things most contractors get wrong:

1. The adjustment is not automatic. You have to request it and document the methodology. Nobody’s going to hand it to you.

2. The government has been wildly inconsistent in how it evaluates these claims, which is exactly why NOAA issued an RFI on standardizing the methodology earlier this month.

FAC 2026-01 (effective March 13, 2026) updated the clause language for the FAR Overhaul. If your contracts still reference the old version, flag it with your CO. And a tip worth its weight in billing hours: structure your original pricing to track mandatory vs. voluntary fringe components separately. It makes adjustment claims vastly easier to defend when the CO pushes back. (Acquisition.gov — FAR 52.222-43)

Dates to remember

• Apr 22 — The New DEI Crackdown: What Federal Contractors Must Do Now (PilieroMazza webinar). Three days before the hard clause deadline — worth attending.

• Apr 23 — Future-Proofing Your Contracts: Legal Compliance Updates (PilieroMazza, Nichole D. Atallah). FAR overhaul, SCA compliance updates, and 2026 enforcement landscape.

• Apr 25 — HARD DEADLINE: DEI contract clause must be in all new and modified contracts (EO 14398). No grace period.

• Apr 28 — Comment deadline: DOL Independent Contractor NPRM (economic reality test for FLSA/SCA worker classification). Submit at regulations.gov.

• Apr 28–30 — ABCs of the SCA: Critical Path Training (PilieroMazza, Atallah & Nash). Three-day intensive covering WDs, fringe compliance, and WHD enforcement. Strongest SCA-specific training currently available.

• May 6–7 — 2026 DOL Forum: Protecting America’s Workforce (Free, virtual). WHD, OSHA, EBSA, EEOC, IRS panels. The self-audit session led by WHD is directly relevant for SCA program development.

• May 11 — EO 13658 minimum wage increases to $13.65/hr. Applies to pre-January 30, 2022 contracts not renewed under EO 14026.

• May 26 — Comment deadline: DOL H-1B/PERM Prevailing Wage NPRM. Proposed Level I wage floor would shift from 17th to 34th percentile — effectively doubling entry-level H-1B wages. (DOL ETA)

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Welcome to Part 31, the prevailing wage newsletter that helps federal SCA contractors protect their margins and stay compliant on post-award operations.

This week: Your CPARS ratings just got a lot more consequential. As of April 1, past performance evaluations are no longer locked in a source selection vault. They follow you across the entire acquisition lifecycle.

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In this issue:

📋 CPARS Ratings Now Visible Across the Acquisition Lifecycle

⚖ Fourth Circuit Clears DEI Certification for Enforcement

🏛️ $30M FCA Settlement Signals No Letup

🤖 DOL’s AI Initiative Targets Federal Service Workforce

📖 Know the Reg

📅 On the Horizon

Your CPARS ratings just left the source selection room.

Every agency decision maker can see them now.

The FAR overhaul went into effect April 1, 2026. The critical change: past performance evaluations are no longer marked “Source Selection Information” and no longer restricted to future source selection decisions. Starting now, your CPARS ratings, narratives, and supporting data can be used throughout the entire acquisition lifecycle.

That means contract administrators, COs exercising options, program managers reviewing task order performance, and agency officials making responsibility determinations all have access to the same performance record that used to live behind a source selection wall. Wiley’s analysis calls this one of the few “substantive changes” in the Part 42 overhaul.

For SCA contractors, this shift is operationally significant. Labor compliance performance on covered contracts, including H&W fringe delivery, wage determination conformance, and WHD audit outcomes, now feeds directly into option exercise decisions, task order awards, and responsibility reviews. A marginal CPARS rating on one contract can follow you into every other conversation an agency has about your company.

Why it matters

Under the old rule, a mediocre past performance evaluation hurt you in the next source selection and nowhere else. Under the new rule, it can influence whether an agency exercises your option, assigns you the next task order, or questions your responsibility on an unrelated procurement. The change also eliminates the cautionary language that previously discouraged agencies from sharing performance data outside source selection contexts.

The Acquisition Alert confirms: “Evaluations of contractor performance developed on contracts awarded prior to April 1, 2026 should be marked ‘Source Selection Information.’” Contracts awarded after April 1 carry no such marking. Your performance record is now a portfolio-wide asset or liability.

What to do now

1. Pull your current CPARS evaluations across all active contracts. Read the narratives, not just the ratings. If any evaluation references SCA compliance issues, wage determination errors, or WHD findings, those are now visible to every agency decision maker, not just source selection teams.

2. If you have pending CPARS evaluations with unresolved contractor comments, escalate them. The new visibility makes contested ratings more consequential.

3. Brief your program managers. CPARS is no longer an annual administrative task. It’s a continuous performance record that affects option exercises, task orders, and responsibility determinations.

4. Document SCA compliance performance proactively. If your H&W delivery is clean, your WD conformances are current, and your WHD record is strong, make sure your CPARS narratives reflect it.

5. Monitor the final rule. FAR Case 2026-012 (Parts 34, 42, and 48) is still in draft. The deviation is live now, but the permanent rule may add further changes.

In Brief

1. DEI ENFORCEMENT

Fourth Circuit Clears the Path. The DEI Certification Provision Is Now Enforceable.

The U.S. Court of Appeals for the Fourth Circuit vacated the preliminary injunction that had blocked enforcement of the EO 14173 DEI certification requirement. The court held that certifying compliance with existing anti-discrimination laws does not compel or restrict protected speech. The certification provision is now live.

But the boundaries remain unsettled. Chief Judge Diaz’s concurrence acknowledged there is “absolutely” lawful DEI activity, and the court explicitly declined to define what constitutes “illegal DEI” at this stage. Dechert’s analysis notes that “litigation challenging the Trump Administration’s anti-DEI executive actions is ongoing, and the legal landscape remains fluid.”

Combined with the March 26 EO requiring the new mandatory contract clause by April 25, this creates a two-front enforcement posture: the certification provision from EO 14173 is enforceable now, and the new FCA-backed clause arrives in 19 days. If you haven’t completed your internal DEI audit, the window is closing. PilieroMazza’s April 22 webinar is the most targeted guidance session available before the deadline.

2. FCA ENFORCEMENT

$30M Settlement Reminds Everyone: FCA Enforcement Doesn’t Take Breaks.

Two Ohio asphalt companies paid $30 million combined to settle False Claims Act allegations of submitting fraudulent testing data on federally funded highway projects. The companies allegedly submitted false lab results certifying that materials met federal specifications when they did not.

This isn’t an SCA case. But the enforcement mechanism is identical to the one now attached to the DEI contract clause. FCA materiality means the government doesn’t need to prove you intended to defraud. It needs to prove you certified something material that wasn’t true. DOJ recovered a record $6.8 billion in FCA settlements in FY2025 with 1,297 qui tam filings. The enforcement appetite is structural, not cyclical. Every compliance shortcut on a federal obligation, whether it’s testing data, DEI certifications, or SCA fringe delivery, carries the same treble-damage math.

3. WORKFORCE

DOL Launches “Make America AI-Ready.” If You Manage a Federal Service Workforce, Take Note.

DOL announced a free AI literacy course for workers on March 24, aligned with its broader AI Literacy Framework. The initiative targets workers whose jobs may be affected by AI-driven changes, including federal service contract employees.

For SCA contractors, this signals DOL’s growing attention to how AI reshapes the work performed under service contracts. If AI tools automate tasks currently classified under SCA wage determinations, questions about worker classification, covered positions, and WD applicability follow. The initiative is voluntary today. The regulatory attention behind it is not. Track this alongside the independent contractor proposed rule (comments close April 28), which could further complicate worker classification on AI-augmented service contracts.

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Know the Reg

FAR 42.1503 / FAR 2.101

Source Selection Information

Until April 1, 2026, contractor past performance evaluations were classified as “Source Selection Information” under FAR 2.101 — meaning they could only be used in future source selection decisions and were restricted from broader disclosure.

The Revolutionary FAR Overhaul’s Part 42 rewrite removed that designation. CPARS evaluations on contracts awarded after April 1 are no longer marked Source Selection Information and can now be used across the entire acquisition lifecycle: option exercises, task order decisions, responsibility determinations, and contract administration actions.

The practical shift is significant. Under the old framework, a poor CPARS narrative on one contract stayed in a source selection silo. Under the new framework, it follows you into every agency decision about your company. For SCA contractors, this means labor compliance performance — H&W delivery, WD conformance, and WHD audit history — is now visible to every decision maker, not just the next evaluation board. Your CPARS record is no longer a source selection data point. It’s a portfolio-wide reputation score.

Dates to remember

• Apr 15 — Labor Rules & Regulations: Federal Market Compliance (PilieroMazza). Virtual training with Sarah Nash on SCA/DBA labor compliance for federal contractors.

• Apr 22 — The New DEI Crackdown: What Federal Contractors Must Do Now (PilieroMazza). Nash, Feinberg, and Brier. The most targeted DEI compliance guidance before the April 25 clause deadline.

• Apr 23 — NCMA Warfighter Acquisition Forum. Ronald Reagan Building, Washington, D.C.

• Apr 25 — Deadline: Agencies must insert DEI contract clause into contracts (EO 14398). Internal audit should be complete before this date.

• Apr 28 — Deadline: Comments on DOL Independent Contractor Proposed Rule (DOL). The streamlined economic reality test could change SCA coverage determinations.

• Apr 28–30 — ABCs of the SCA: Critical Path SCA Training (PilieroMazza). Three-day virtual training with Atallah and Nash. 2 PM–4 PM ET daily.

• May 11 — EO 13658 minimum wage increase to $13.65/hr takes effect. Applies to pre-Jan 30, 2022 contracts not renewed under EO 14026. Hard effective date, not a grace period.

• May 21 — DOL Prevailing Wage Seminar: SCA (Virtual). Free WHD seminar covering wage determinations, conformances, and enforcement. 11 AM–5:30 PM ET.

• May 25 — Deadline: FAR Council DEI deviation guidance due. Agencies must issue interim guidance on the DEI contract clause within 60 days of the March 26 EO.

• Jul 26–29 — NCMA World Congress 2026. Walt Disney World Swan & Dolphin, Orlando.

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Welcome to Part 31, the prevailing wage newsletter that helps federal SCA contractors protect their margins and stay compliant on post-award operations.

This week: DOL’s Administrative Review Board just upheld a three-year debarment for a contractor whose SCA violation wasn’t even intentional. “Culpable neglect” was enough.

In this issue:

⚖ Debarment for Non-Willful SCA Violations

💊 ACA Premiums Double, ICHRA Gains Ground

🏛️ FAR Overhaul Shifts to Outcome-Based Compliance

⚖ GAO Sustains WD Amendment Protest

🚨 New DEI EO Creates FCA Liability

📖 Know the Reg

📅 On the Horizon

The DOL Administrative Review Board affirmed a three-year debarment of Seven Hills, Inc. under the SCA (ARB No. 2024-0005, ALJ No. 2018-SCA-00002), even though the contractor did not act willfully and paid all back wages and fringe benefits once the violations were identified.

The violation: failing to promptly implement a new wage determination after a contract modification. The contractor argued it relied on guidance from the contracting activity (NEXCOM). The ARB rejected that defense outright. Contractors have an affirmative obligation to seek DOL guidance on SCA compliance, not agency guidance. The contracting officer is not your compliance department.

The standard that got them: “culpable neglect.” Not fraud. Not willful underpayment. Neglect. The ARB held that repayment of back wages is not a safe harbor against debarment. You can write every check WHD asks for and still lose your ability to bid for three years.

Why it matters

This resets the risk calculus for every SCA contractor. Most operators treat wage determination updates on contract modifications as routine paperwork. This decision says that’s exactly the attitude that triggers debarment. A three-year ban affects not just the contract in question but your entire federal portfolio. Teaming partners drop you. Primes won’t sub to you. The downstream revenue loss dwarfs whatever back wages you owed.

CWC’s follow-up guidance puts it plainly: treat contract modifications and WD updates as “critical compliance action items, not routine paperwork.”

What to do now

1. Audit your process for implementing wage determination changes on contract modifications. If your process is “the CO tells us,” you have a gap.

2. Build a documented compliance review trigger for every contract modification, not just the ones that look like they involve labor.

3. Verify that your team knows to seek DOL/WHD guidance on SCA questions, not contracting officer guidance. The ARB made the distinction explicit.

4. If you have unresolved WD discrepancies on any active contract, fix them now. Voluntary correction before an investigation is the strongest defense you have. WHD Administrator Rogers confirmed at the PayrollOrg Capital Summit that WHD rewards proactive self-correction.

5. Review WHD’s PAID (Payroll Audit Independent Determination) program as a self-audit safe harbor. Rogers flagged it specifically as a compliance tool for good-faith employers.

In Brief

1. FRINGE & BENEFITS

ACA Premiums Doubled. Your Employees Noticed. Your Fringe Strategy Should Too.

The enhanced ACA premium tax credits expired December 31, 2025. The House passed a three-year extension in January, but the Senate hasn’t acted. The result: subsidized enrollees’ premium payments more than doubled, a 114% average increase according to KFF. Unsubsidized benchmark premiums rose 26% in 2026, the largest jump in eight years.

If your SCA fringe strategy relies on employees using ACA marketplace plans to satisfy H&W obligations, those employees are now paying significantly more out of pocket. The math that worked in 2025 may not work in 2026.

ICHRA adoption is accelerating as a response. CBIZ published analysis positioning ICHRAs as a “strategic response” to subsidy changes. ICHRA allows per-class customization (full-time vs. part-time, geographic), which maps well to SCA workforce structures. The 2026 affordability threshold is 9.96%, with an FPL safe harbor monthly limit of $129.89.

Action: Model the impact of expired PTCs on employees using marketplace plans for H&W. Evaluate ICHRA as an alternative fringe delivery mechanism for FY2027 bids now, not at option exercise.

2. REGULATORY

The FAR Overhaul Is Live. Your Compliance Checklists Are Already Outdated.

Phase 1 of the Revolutionary FAR Overhaul is complete. The final batch of class deviations for Parts 8, 15, 16, 42, 45, and 47 went effective March 16. FAR Part 22 (which contains SCA provisions at Subpart 22.10) hasn’t been overhauled yet, but the surrounding framework has changed fundamentally. Clause numbers are renumbered. Thresholds have shifted: TINA up from $2M to $10M, CAS full coverage from $50M to $100M, CAS per-contract from $2.5M to $35M (effective after June 30, 2026).

The bigger shift is philosophical. Ogletree Deakins published analysis (March 13) flagging the move to “outcome-based accountability.” The principles-based framework relies on contractor judgment rather than prescriptive FAR checklists. Translation: your internal compliance processes now carry the weight that FAR specificity used to carry.

FAR Case 2025-007 also updated RFO Parts 1, 5, 10, 22, 25, and 52 for trade agreement thresholds, the first formal case to modify the RFO model deviation text.

Action: Pull updated RFO text from acquisition.gov. Update proposal templates, compliance matrices, and flowdown clauses that reference FAR/DFARS numbers. If you haven’t started, you’re already behind.

3. CASE LAW

GAO Hands Protesters a New Tool: Unacknowledged Wage Determination Amendments.

In Ryba Marine Construction Co. (B-423796.2), GAO sustained a protest where the awardee failed to acknowledge a solicitation amendment that updated the Davis-Bacon wage determination and revised structural specs. The GAO held that materiality is judged by substance, not dollar impact, and that acknowledging an amendment is a binding legal act with limited agency discretion to waive.

The nuance: GAO split its analysis element-by-element. The WD portion of the amendment only affected labor categories not required under the contract, so it was immaterial. The structural specs were material. Materiality is assessed per element, not in aggregate.

This applies directly to SCA wage determinations incorporated by amendment. If you lose an award and the winner didn’t acknowledge a WD amendment, check the labor categories. If any affected category is required under the contract, you may have a viable protest.

4. ENFORCEMENT · COMPLIANCE

New DEI Executive Order Creates FCA Liability for Federal Contractors. You Have 30 Days.

President Trump signed an executive order on March 26 requiring agencies to insert a new six-point clause into all contracts, subcontracts, and lower-tier subcontracts within 30 days (by April 25, 2026). Contractors must certify they do not engage in “racially discriminatory DEI activities,” defined as disparate treatment based on race or ethnicity in hiring, promotions, contracting, or resource allocation.

The teeth: compliance is deemed “material to the Government’s payment decisions” under the False Claims Act (31 USC §3729). Submitting an invoice while a prohibited activity exists could trigger FCA liability, not just contract termination or debarment. FortneyScott’s analysis breaks down the full six-point clause. WorldatWork’s federal roundup provides additional context.

Action: Audit employee programs, mentoring tracks, ERGs, and supplier diversity initiatives for race/ethnicity-based eligibility criteria now. Update subcontractor flowdown clauses. FAR Council must issue interim guidance within 60 days. Do not wait for the guidance to start your internal review.

Know the Reg

29 CFR § 4.187 · Term of the Issue

Culpable Neglect

Under the SCA’s debarment provisions, DOL does not need to prove a contractor intended to violate wage requirements. “Culpable neglect” is sufficient. It means the contractor should have known about its obligations but failed to take reasonable steps to comply. Relying on a contracting officer’s interpretation of SCA requirements rather than seeking DOL/WHD guidance qualifies. Paying back wages after the fact does not cure the neglect. The ARB’s recent decision in Seven Hills, Inc. confirmed this standard applies even when the contractor cooperated fully and remediated immediately. The practical implication: your compliance system must include affirmative monitoring of wage determinations, not reactive correction.

On the horizon

• Apr 15 — Labor Rules & Regulations: Federal Market Compliance (PilieroMazza). Covers labor compliance obligations in the federal market, including SCA and Davis-Bacon.

• Apr 28–30 — ABCs of the SCA: Critical Path SCA Training for GovCon (PilieroMazza). Three-day SCA deep dive from Atallah & Nash. If you’re new to SCA or onboarding compliance staff, this is the one.

• May 12–15 — Payroll Congress 2026 — Nashville, TN. PayrollOrg’s flagship conference. Four days of workshops on compliance, wage & hour, and government contracts.

• May 21 — DOL Prevailing Wage Seminar: SCA (Virtual). Free WHD seminar covering SCA coverage, wage determinations, conformances, and enforcement. 11 AM–5:30 PM ET.

• Jul 26–29 — NCMA World Congress 2026 — Orlando, FL. NCMA’s flagship event at Walt Disney World Swan & Dolphin. Acquisition, contracting, and compliance across the federal market.

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Welcome to Issue 001. This newsletter exists because the SCA community has always deserved a sharp, plain-English briefing and has never had one. We plan to fix that, bi-weekly, starting now.

Today: DOL just moved the minimum wage floor to $13.65 effective May 11th. Keep reading to learn exactly what that means for your contracts, your bids, and your fringe program.

In this issue:

💰 Minimum Wage Floor Raised to $13.65

⚖️ SCA Coverage & Staffing Workers

📋 EEO-1 & OFCCP Risk

📅 Successor Contract Window

📖 Know the Reg

Effective May 11, 2026, the hourly minimum wage for certain SCA contracts subject to area wage determinations rises to $13.65 per hour—up from $13.35. The $0.30 increase is modest on paper. Across a workforce of 50 covered employees working full-time, that’s roughly $31,000 in additional annual fringe obligations you didn’t price into existing contracts.

The new minimum wage rate applies to federal contracts entered into between January 1, 2015 and January 29, 2022, that were not renewed or extended on or after January 30, 2022. The new rate does not apply to contracts entered into after January 20, 2022. Specifically, Executive order 13658 (signed February 12, 2014) established a minimum wage for workers on covered federal contracts.

What to do before May 1st

Step 1. Audit your contract portfolio and identify all SCA covered contracts entered into between Jan 1, 2015 and Jan 29, 2022, that have not renewed or extended.

Step 2. Notify and coordinate with your payroll and HR teams to ensure wage systems are updated to reflect $13.65 effective May 11, 2026.

Step 3. Review subcontractor flow-downs.

Step 4. Update cost accounting and forecasting for affected contracts through the remaining period of performance.

Step 5. Post required notices. EO 13658 requires contractors to post notices of the applicable minimum wage rate in a prominent and accessible place at the worksite.

Context: EO 13658 vs 14026

Be aware that two separate EO wage schedules are currently in effect. EO 14026 (signed April 27, 2021) applies to contracts entered into, renewed, or extended on or after January 30, 2022, and carries a higher minimum wage rate. The $13.65 rate exclusively applies to the older EO 13658 population of contracts. Contractors who have both pre-2022 legacy contracts and newer contracts should maintain parallel compliance tracking to avoid applying the wrong rate to the wrong contract.

In Brief

1. SCA COVERAGE SCOPE

Your staffing agency workers may be SCA-covered. Most contractors assume they’re not.

SCA coverage isn’t determined by your contract structure — it’s determined by the nature of the work. If a worker placed by a staffing agency is performing services that would be SCA-covered if performed by a direct hire, WHD’s economic reality analysis often finds coverage applies anyway. The H&W obligation can follow the work, not the W-2. Contractors with a significant contingent workforce on federal sites should map their SCA coverage scope against their actual workforce arrangement—not just their payroll headcount. The gap between those two numbers is where WHD finds back wages.

2. OFCCP RISK

EEO-1 data is now public. OFCCP uses it. Do you know what yours shows?

Aggregated EEO-1 workforce data from recent filing cycles is now publicly accessible. This matters for SCA contractors because OFCCP increasingly cross-references industry workforce composition benchmarks when selecting contractors for compliance reviews. The data itself isn’t the risk. The risk is not knowing how your submission compares before an OFCCP scheduling letter arrives. Pull your last EEO-1 filing and look at your job group composition against the public aggregates for your NAICS code. Surprises are better found internally.

3. SUCCESSOR CONTRACTS

Q2 is the riskiest quarter for successor obligation failures. Here’s why.

Federal fiscal year runs October–September, which means January–March is when many contract recompetes transition. If you’ve recently won a successor contract and haven’t formally requested the predecessor’s seniority list within 10 days of contract award, you may already be in violation. That list determines which employees you’re obligated to offer employment. It’s not optional, and “we didn’t know” is not a WHD defense.

Know the Reg

29 CFR Part 4 · Term of the Issue

Bona Fide Fringe Benefit

Under 29 CFR Part 4, the H&W fringe obligation is only satisfied by a “bona fide” benefit. Meaning a genuine, ongoing commitment to employee welfare, not just an accounting entry. A plan that technically charges H&W contributions but returns forfeitures to the employer, layers excessive administrative fees, or provides coverage that never actually insures the worker does not qualify.

The WHD looks at the net benefit delivered to the employee, not the cost shown on the employer’s books. Plans that fail this test leave contractors liable for the full H&W fringe in cash, retroactively, plus potential back-wage penalties. If you’re not sure whether your plan qualifies, ask your plan administrator for a written bona fide determination.

On the Horizon

Apr 1

Q2 WHD reporting cycle closes. Begin pulling your certified payroll records for any audits pending from Q4 2025 activity.

May 11

Minimum wage rate effective date. $13.65/hour applies to all area WD contracts. This is not a grace period deadline; it’s a hard effective date.

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