If the contractor is paying employees well above the minimum wage determination is the Government required to pay additional for an increase in H&W? In other words, the total paid to employees is more than the individual minimum wage rate and the current H&W rate combined. Because the total rate paid is higher than required, is the contractor owed an increased amount due to the increase in H&W?
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Fringe benefits are required to be provided separate from and in addition to the specified minimum hourly rate provided on the wage determination. As such, any increase in the H&W rate would be addressed separately from the basic, hourly wage determination rate. Based on the information you provided, it appears the contractor is entitled to the separate increase in the H&W rate despite the combined rates falling within the combined minimum WD rate. You may find the U.S. Dept. of Labor's FAQ section on fringe benefits helpful.