What “H&W” on your paycheck means

If you see “H&W,” “Health & Welfare,” or “fringe” as a separate line on your pay stub, you almost certainly work on a contract covered by the Service Contract Act. That is a federal law that applies to most service work done for the U.S. government. It requires your employer to pay you at least a set hourly wage for your job and, on top of that, to provide a set amount of benefits for every hour you work, up to 40 hours a week.

That benefit amount is the H&W rate. As of August 2026 it is $5.92 an hour on most contracts, or $5.42 an hour on contracts that also give you federally required paid sick leave. The rate is set by the Department of Labor and usually changes every summer.

Why it might show up as cash.Your employer can meet the H&W requirement by paying for benefits (health insurance, dental, life insurance, a retirement contribution) or by paying you the money directly, or with a mix. If the benefits your employer pays for cost less than the required amount for the hours you worked, the difference is owed to you, often as cash on your paycheck. If you declined health insurance, the H&W line may be most or all of the amount. That is normal and legal, as long as the total adds up.

How to check it.Take the hours you worked in the pay period (capped at 40 a week). Multiply by the H&W rate on your contract’s Wage Determination. That is what your employer owes in benefits plus cash for that period. What the company paid toward your benefits, plus the H&W cash on your stub, should equal or exceed it. Your employer is required to be able to show you this math, and a poster at your worksite (DOL form WH-1313) should list the wage and benefit rates that apply.

If the number looks wrong.Ask your payroll or HR contact to walk you through it first; most gaps are timing, not intent. If you cannot get an answer, the Department of Labor’s Wage and Hour Division takes complaints and does not charge for it: dol.gov/agencies/whd/contact. Your employer cannot retaliate against you for asking.

If you handle this for your company: the calculation guide for employers is at How to calculate SCA H&W obligations, and the full FAQ is at SCA Compliance FAQ.

Educational reference, not legal advice. Last updated September 2026.