As a follow-up to Aronson’s webinar on Service Contract Act Basics and Pricing Implications, we have provided answers to several attendee questions below.
What should be done if the job function of my employees doesn’t match a job function in the Wage Determination (WD)? If the job function is for a “service employee” covered by SCA and does not align with a Directory of Occupations labor category identified in the WD, then a conformance process needs to take place. For more information on the conformance process, click here.
Can wages and health and welfare cash payment (cash in lieu of benefits) be paid together in one paycheck? Cash paid in lieu of benefits to satisfy the health and welfare requirement may be included on the same paycheck as wages but must be identified as a separate pay type and NOT added to wages.
To which hours do the health and welfare requirement apply? Continue reading »
The Service Contract Act, which outlines various operational requirements for service contracts over $2,500, can be a compliance nightmare for government contractors caught unaware.
Join Aronson LLC’s Government Contract Services Group for an informative webinar on February 14th which will provide a basic understanding of the Service Contract Act and the related impact on pricing and compliance risks.
Topics will include: Continue reading »
Effective June 17, 2012, the prevailing health and welfare fringe benefits required by the McNamara-O’Hara Service Contract Act (SCA) increased from $3.59 to $3.71 per hour. The Department of Labor (DoL) issued Memorandum Number 211 on June 11, 2012, announcing the change. The new benefit rate is derived from the latest DoL Bureau of Labor Statistics, Employment Cost Index, summary of Employer Cost for Employee Compensation. Don’t let the increase impact your bottom line – Continue reading »
Effective June 17, 2011 the prevailing health and welfare fringe benefits required by the McNamara-O’Hara Service Contract Act (SCA) increased from $3.50 to $3.59 per hour. The Department of Labor (DoL) issued a memorandum on June 10, 2011, announcing the change. The new benefit rate is derived from the latest DoL Bureau of Labor Statistics, Employment Cost Index, summary of Employer Cost for Employee Compensation.
The Department of Labor (DOL) Wage and Hour Division has released the schedule for its 2011 Prevailing Wage Conferences. Conference participants will have the invaluable opportunity to learn directly from the DOL about:
- The Davis-Bacon Act (DBA) and McNamara O’Hara Service Contract Act (SCA),
- The process for obtaining wage determinations (WD) and adding classifications,
- Compliance assistance and enforcement processes,
- The process for appealing wage rage, coverage, and compliance determinations, and
- The labor standards provisions of the American Recovery and Reinvestment Act of 2009
This free training will be offered in the following cities on the following dates – Continue reading »
UPDATE (2/25/11): Since this post was originally published, additional GSA solicitation refreshes have been released incorporating new SCA wage determinations dated January 11, 2011. Affected GSA Schedules include Facilities Maintenance and Management (03FAC), Advertising and Integrated Marketing Solutions (AIMS), and Human Resources and EEO Services (HREEO).
In a recent round of solicitation refreshes, GSA’s Management Services Center (MSC) incorporated an updated index (dated January 11, 2011) of Service Contract Act (SCA) wage determinations into the Schedules it manages - MOBIS, PES, LOGWORLD, Environmental, Language Services, and Consolidated. If you hold one of these contracts and have any SCA-covered labor categories, it is important that you review your contract and determine which economic price adjustment (EPA) clause you have chosen for SCA labor categories. If you are basing SCA rate increases on FAR 52.222-43, Fair Labor Standards Act and Service Contract Act Price Adjustment, then you only have 30 days from the date you are notified of the mandatory modification that incorporates the new wage determinations. Since the GSA Schedules typically only update wage determinations every two years, if you miss the window to increase your rates now, you will likely be stuck at your current rates for the next two years – even though you will be legally required to pay service employees in accordance with the new wage determinations.
GSA’s Management Services Center (MSC) in Auburn, WA, which manages the MOBIS, PES, LOGWORLD, Language Services, Environmental, and Consolidated Schedules, refreshed all of its solicitations on February 3rd, making use of the eMod electronic modification system mandatory for its current contractor holders. This means that contractors who have not yet obtained an IdenTrust or ORC digital certificate will be unable to complete any contract modifications until Continue reading »
Labor law can be a tricky area for government contractors. There are lots of ways to get in trouble and chances are, you don’t know what all of them are. Under the Obama Administration, the Department of Labor (DOL) has hired 150 new investigators who are actively pursuing directive investigations rather than waiting for complaints. Additionally, the DOL has also made its enforcement data publically available online so all the skeletons are coming out of the closet. Now is the perfect time to register for these upcoming DOL events:
12/9/10 Affirmative Action Program (AAP) Development and Preparing for a Desk Audit (Baltimore, MD)
12/14/10 Compliance Assistance Seminar for Construction Contractors (Richmond, VA)
12/16/10 Equal Employment Opportunity (EEO) Obligations of Construction Contractors (Baltimore, MD)
12/21/10 12 Reasons Why Contractors Get in Trouble (Richmond, VA)
I was fortunate enough to attend Piliero Mazza’s breakfast seminar on the Service Contract Act (SCA) last week, featuring Clarence Strain, the Branch Coordinator of the Department of Labor’s (DOL) Wage and Hour Division. This event was one of the most interactive I’ve been to in recent memory, featuring a lot of animated discussion and many questions! One of the hot topics that came up during the event was the potential impact of health care reform on the SCA’s health and welfare requirements.
As you may know, under SCA an employer can only discharge its obligations for health and welfare through bona fide benefits – this does NOT include any “benefits” that the contractor must provide its employees under Federal, State, or local law. So will the major health insurance reform resulting from the recent Patient Protection and Affordable Care Act affect contractors’ health and welfare obligations on SCA-covered contracts? Continue reading »
Effective June 22, 2010, the prevailing health and welfare fringe benefits required by the McNamara-O’Hara Service Contract Act (SCA) increased to $3.50 per hour. The Department of Labor (DoL) issued a memorandum on June 9, 2010, announcing the change. The new benefit rate is derived from the latest DoL Bureau of Labor Statistics, Employment Cost Index, summary of Employer Cost for Employee Compensation.
Don’t let the increase impact your bottom line – know your rights as a Federal contractor. – “Fair Labor Standards Act and Service Contract Act-Price Adjustment (Multiple Year and Option Contracts)” as well as FAR 52.222-44 “Fair Labor Standards Act and Service Contract Act-Price Adjustment” authorize adjustment of fixed price SCA-covered contracts when SCA wage determinations require an increase to the minimum wage or fringe benefits. Contractors are allowed an hourly adjustment equal to the new hourly fringe benefit rate less the hourly cost of the actual benefits provided by the contractor.
Do not delay; the FAR clauses also stipulate that the claim must be submitted within 30 days of the effective modification incorporating a new wage determination.
What We Are Writing
- A Marriage of Inconvenience: GSA Schedule Contracts & The Contractor Code of Business Ethics & Conduct Clause
- Emerging Small Businesses: To Grow Your Business, You Must Plan For Growth
- Government Contracting: Look Before You Leap!
- GSA Schedules – Strategies for Success
- New Employee vs. Independent Contractor Considerations
- Pay on Display – Understanding the Executive Compensation and Subcontractor Data Reporting Requirements & Ramifications
- The GSA Schedule: Your Ticket to the Federal Market (May 2010)
- The New FAR Codes of Conduct and Compliance Program Provisions
- The Seven Deadly Sins (of contract compliance)