SCA vacation and holiday pay: how to price it

Every SCA wage determination (WD) lists paid vacation and paid holidays next to the health and welfare (H&W) rate. They look small on the page. In a bid they are not: each week of vacation and each holiday is an hour you pay for but nobody works, and on a staffed post somebody else has to cover it. This guide shows how the rules in 29 CFR 4.173 and 4.174 work and how to turn them into a price.

1. What the WD says

A typical standard WD, such as WD 2015-5233 rev 35 for the Houston area, sets:

• Vacation: 2 weeks paid after 1 year of service with a contractor or successor, 3 weeks after 5 years, 4 weeks after 15 years.
• Holidays: a minimum of eleven paid holidays per year, which the WD names.

The service steps differ between WDs, so read the fringe section of the WD attached to your solicitation. How to read the rest of the WD is in how to read an SCA wage determination.

2. Vacation: service with the predecessor counts

The words "with a contractor or successor" matter most. Under 29 CFR 4.173(a), length of service includes the employee's continuous time with your company (commercial work too) and the time with any predecessor contractors that did similar work at the same federal facility. Prior service as a federal employee does not count.

So if you win a recompete and keep the incumbent janitors, you inherit their seniority. A worker with 6 years on the building is owed 3 weeks of vacation on the anniversary date, even though it is your first day as the contractor.

Four more rules from 4.173 that change the math:

• Vesting on the anniversary date. Unless the WD says otherwise, nothing accrues before the anniversary date, and there is no proration for part of a year (4.173(c)(1)).
• The employer on that date pays it all. Liability is not split between the old and new contractor. Whoever employs the worker on the anniversary date owes the full benefit (4.173(d)(1)).
• Current wage rate. Vacation is paid at the hourly rate in effect in the week the vacation is taken or paid (4.173(e)(1)).
• Deadline. It must be given, or paid in cash, before the next anniversary date, the end of the contract or the employee's termination, whichever comes first (4.173(c)(2)).

To know what you are taking on, you need hire dates. The incumbent must give the contracting officer a certified list of employees and their anniversary dates at least 10 days before its contract ends, and the contracting officer gives it to the successor when the new contract starts (FAR 52.222-41(n)). That is after you bid, so ask for tenure data in the questions period, and if you get none, assume a mix and say so in your price narrative.

3. Holidays: the workweek rule

Under 29 CFR 4.174(a)(1), an employee who does any work in the week of a named holiday is owed the holiday, even if it falls on a day off. You cannot require a waiting period or work the day before and after unless the WD says so.

• A full-time employee gets a full day's pay, up to 8 hours (4.174(c)(1)).
• An employee who works on the holiday gets the holiday pay in addition to pay for the hours worked, or another day off with pay (4.174(c)(2)).
• Part-time employees get a share in proportion to their hours. Someone on a regular 16-hour week gets two-fifths of the full-time holiday pay (29 CFR 4.176).

4. H&W is owed on vacation and holiday hours too

SCA fringe benefits are owed on all hours paid, up to 40 hours a week and 2,080 a year (29 CFR 4.172). Vacation and holiday hours are hours paid, so H&W keeps running on them (4.173(e)(2)). A full-time employee costs 2,080 hours of H&W per year no matter how much of that is leave.

5. How to put it in the price

There are two common ways, and they give different numbers because they answer different questions.

• Per hour paid. 29 CFR 4.177(c)(5) converts the benefits into an hourly cash equivalent: wage × benefit hours ÷ 2,080. That is the right way to check you pay the minimum.
• Per hour worked. Agencies buy coverage. If a post must be filled 2,080 hours a year, the hours lost to leave have to be worked by someone else, at full cost. Spread the annual cost of a worker over the hours they actually work.

For bidding, the second method is the one that protects your margin.

Worked example: cost per productive hour for a janitor

Janitor (11150) on WD 2015-5233 rev 35: wage $14.74, H&W $5.92, 11 holidays (88 hours). A full-time worker is paid 2,080 hours a year:

Now take off the holiday hours and the vacation hours for the worker's service step, and divide by the hours actually worked:

The same janitor is $20.66 per hour paid (wage plus H&W), but $22.48 to $23.46 per hour of coverage. For an incumbent crew of 10 with 4 workers at 2 weeks, 5 at 3 weeks and 1 at 4 weeks, the crew works 18,840 of its 20,800 paid hours, and the blended cost is $429,728 ÷ 18,840 = $22.81 per worked hour. All of this is before payroll taxes, workers' compensation, overhead, G&A and profit, which are covered in how to build a burdened labor rate for an SCA bid.

On a post staffed every day of the year, such as a security post, the holiday hours are not lost: someone works them and is also owed holiday pay. Price those 88 hours per employee as extra cost on top of full coverage.

Related guides

• How to read an SCA wage determination
• How to build a burdened labor rate for an SCA bid
• SCA successor contractors and CBA wages

Sources

• SAM.gov: Wage Determination 2015-5233, revision 35 (Texas)
• eCFR: 29 CFR part 4, sections 4.172, 4.173, 4.174, 4.176 and 4.177
• Acquisition.gov: FAR 52.222-41, Service Contract Labor Standards (paragraph (n), seniority list)
• U.S. Department of Labor: SCA Wage Determinations (Prevailing Wage Resource Book)

Last reviewed: November 2026. This guide is a pricing aid and general information, not legal advice.