How to read a federal wage determination, and price your bid from it

Every federal cleaning or grounds bid comes with a wage determination. It sets the lowest hourly pay and benefits you can give each worker on the contract, and labor is most of what you're pricing. Get it wrong and you either lose the bid or win a contract that loses money.

A wage determination runs to a dozen pages of small print, but only a handful of lines matter for most bids. This guide walks through them using a real one, and shows how the numbers turn into an hourly cost.

What a wage determination is

The Service Contract Act covers federal service contracts over $2,500. On those contracts you must pay at least the wage and fringe benefits that the Department of Labor sets for each job in that area. The document that lists them is the wage determination, and the contracting officer has to attach one to every new service contract over $2,500.

You'll usually find it among the bid's attachments on SAM.gov. Price on the one attached to the bid, even if SAM.gov shows a newer revision. You can look any of them up on SAM.gov's wage determination search.

There are two kinds. Most are area wage determinations, which cover a group of counties. The other kind is based on a union contract. If the current contractor's workers have a collective bargaining agreement, the next contractor generally has to pay at least the wages and benefits in that agreement, including raises it has already scheduled. The bid will attach that agreement's terms in place of the area rates.

The parts that matter

We'll use wage determination 2015-4281, which covers DC, Prince George's and Charles counties in Maryland, and Northern Virginia from Arlington and Alexandria out to Loudoun, Prince William and Stafford. This is revision 39, dated August 22, 2026.

1. Which wage determination it is

The top box gives the wage determination number, the revision number and the date. Check that the revision matches the one the bid lists. Then check that the place of performance is in the counties it names.

2. The rate for each job

Each job has a code, a title and a minimum hourly wage. For cleaning and grounds work, these are the lines most bids use:

Wage determination 2015-4281, revision 39 (August 22, 2026). Rates differ by area and change with each revision, so always use the one in your bid.

Match each person on your crew to the job that fits the work they'll actually do, not their title at your company. If someone both mows and prunes, you owe the higher of the two rates for every hour they work that week, unless your records show the time spent on each (29 CFR 4.169).

3. Health and welfare

Below the rates is a benefit every listed job gets: health and welfare. On this revision it's $5.92 an hour. A second line gives a lower rate, $5.42, for contracts that also come under the paid sick leave order (more on that below). That covers most new contracts, because the order applies to contracts awarded since 2017.

You owe it for every hour you pay, including vacation, holidays and sick leave, up to 40 hours a week and 2,080 a year. Overtime hours don't earn it. You can pay it as real benefits, such as health insurance, as cash on the paycheck, or a mix of the two. Cash fringe can't be counted toward the hourly wage.

The rate went up from $5.55 to $5.92 on revisions issued after August 10, 2026. If the wage determination in your bid still shows $5.55, price on $5.55. The new rate reaches your contract when it gets a newer wage determination, usually at an option year.

4. Vacation and holidays

This one requires two weeks of paid vacation after a year of service, three weeks after five years and four after fifteen. A worker's time with the previous contractor at the same site counts toward that. It also requires eleven paid holidays: the federal holidays, Juneteenth included. Vacation terms vary from one area to the next, so read them on every bid.

5. Paid sick leave

Under Executive Order 13706, workers on contracts awarded since 2017 earn at least one hour of paid sick leave for every 30 hours they work, up to 56 hours a year. It's still in force. That's why the lower health and welfare rate exists: you pay the sick leave separately, and it doesn't count toward your other benefits.

6. The footnotes

Skim the notes at the end. Two come up often in our trades:

• Uniforms. If workers must wear uniforms, you supply them for free. If they have to wash them themselves, you pay them $3.35 a week, unless the uniforms are wash-and-wear.
• Executive Order minimum wage. The $17.75 contractor minimum wage from Executive Order 14026 was revoked in March 2025 and no longer appears on new revisions. An older minimum, $13.65 under Executive Order 13658, still applies to some contracts awarded between 2015 and early 2022. For a new bid, the rates on the wage determination are your floor.

What an $18.19 rate really costs

The hourly rate on the page isn't your cost per hour of work. You also pay for time off, when nobody is cleaning, and health and welfare is owed on those hours too. Here's one full-time janitor on wage determination 2015-4281, revision 39, on a contract covered by the sick leave order:

That's about 45% more than the rate on the page, and you haven't added anything else yet. Payroll taxes and workers' comp go on top, then supplies and equipment, supervision, and your overhead and profit. In the first year a new hire may not have earned vacation yet, but if you keep the current workers, their time with the old contractor counts.

So when you work out how many hours a building takes, multiply by the cost per hour on the job, not by the wage. That one step is where many first bids come out too low.

If a job you need isn't listed

Sometimes the work calls for a job the wage determination doesn't list. You don't get to pick any rate you like. You set one in reasonable relationship to the listed jobs, and send it to the contracting officer on a Standard Form 1444 within 30 days of that person starting work. The Department of Labor then approves or changes it. If it changes, you owe the difference back to their first day.

Price every year, not just the first

Most cleaning and grounds contracts have a base year and up to four option years. When an option year starts, the contract can get a newer wage determination with higher rates. A price adjustment clause covers that increase: the higher wages and benefits, plus the payroll taxes and workers' comp that go with them. It doesn't cover overhead or profit, and it doesn't cover raises you choose to give above the required rate. You must ask for the adjustment within 30 days of getting the new wage determination.

The clause protects you from required increases, so you don't have to guess at them. Price each year on what you'll actually pay, including any raises you plan to give.

Tell your workers

On the first day of the contract, each worker must get the wage determination, or you must post it where they can see it. You also have to put up the Department of Labor's Service Contract Act poster at the worksite.

New to federal work? Start with our first-contract guide. To find the wage determination and everything else that matters in a solicitation, see how to read a government contract bid.