Lexy Kessler, a partner at public accounting and consulting firm Aronson LLC, speaks to Risk & Compliance Journal about the impact of new regulations on government contractors and the uncertainties that arise when lawmakers can’t agree on a federal budget.
What is the Service Contract Act and how is it changing the landscape for companies trying to win government contracts?
Ms. Kessler: The Service Contract Act is a set of labor laws in place relative to certain categories of employees. We are seeing a lot of companies that don’t understand what the regulations are, what is required in having to classify employees. Under these regulations they have to pay them a certain dollar amount that is required for health and welfare benefits. We have had situations where companies come to us and say they didn’t know that and now they have to go back and quantify and capture the appropriate pay and, as importantly, communicate to their employees that they are paying these benefits and how. A lot of times what people, as far as more professional services firms, IT firms, don’t realize is that some of their help desk functions may be subject to the SCA and that they can be fined from the Department of Labor.
Keep reading this interview at: http://blogs.wsj.com/riskandcompliance/2014/08/19/the-intricacies-of-meeting-government-contract-compliance-rules/