Companies doing business with the federal government must comply with a litany of complex laws and regulations that affect their day-to-day business operations. To assist government contractors, this guide discusses some of the labor and employment laws and regulations that should be considered when pricing and performing a government contract.
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Paying workers as independent contractors instead of as employees may land a former executive in jail for criminal wire fraud. On June 12, 2019, the former operations manager and vice president of a Florida-based mail transportation contractor pled guilty to two counts of wire fraud related to such treatment. The Government’s case was based on pricing estimates for employee-related costs that the contractor later did not incur because it instead used independent contractors.
In the June 1, 2018 indictment of Alexei Rivero, the Government contended that Rivero purposely misclassified the drivers it hired as independent contractors. According to the indictment, this allowed the contractor to “misappropriate” $1.5 million in USPS contract payments “designated” for fringe benefits and $1.2 million designated for payroll taxes.
Continue reading at: Husch Blackwell’s The Contractor’s Perspective
Loyal Source Government Services LLC – a medical and support staff contactor based in Orlando, Florida – will pay $574,989 to 4,047 employees after a U.S. Department of Labor Wage and Hour Division (WHD) investigation determined the company violated the McNamara-O’Hara Service Contract Act (SCA).
WHD investigators found Loyal Source Government Services LLC unlawfully deducted $10 per paycheck from each employee for the administration of employee health and welfare benefits.
“This investigation demonstrates the Department of Labor will enforce all applicable laws to ensure that employees receive legally required pay and benefits,” said Wage and Hour Division District Director Daniel White, in Jacksonville. “The Department’s Wage and Hour Division encourages all employers to make use of the many tools we provide to help them understand and comply with the law, and to call us for assistance.”
For more information about the SCA and other laws enforced by the Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd/ including a search tool to use in the event a worker suspects he/she may be owed back wages.
Source: https://www.dol.gov/newsroom/releases/whd/whd20180907
The U.S. Department of Labor (DOL) has released its annual memorandum with the rate increase for Service Contract Act (SCA) Health and Welfare (H&W) Fringe Benefits. The new rate of $4.41 per hour (up from the 2015-2016 rate of $4.27 per hour) is required in all government contract bids or other service contracts awarded on or after August 1, 2017.
A special rate of $1.91 per hour is set for Hawaii, which takes into account that state’s mandatory health insurance coverage. However, an employer may use this lower rate only if it actually makes contributions for employees under the Hawaii Prepaid Health Care Act.
DOL officials indicated earlier this year that the rates set for 2017 would account for contracts subject to Executive Order 13706, which applies to new contracts that result from solicitations issued on or after January 1, 2017, or that are awarded outside the solicitation process on or after that date. The EO requires covered contractors to provide employees up to 56 hours of paid leave sick leave annually.
Keep reading this article at: http://www.jdsupra.com/legalnews/increase-in-2017-service-contract-act-87128/
The U.S. Department of Labor is reinstating the issuance of opinion letters. The letters, issued by the department’s Wage and Hour Division, is one of its methods the department uses to provide guidance to covered employers and employees.
An opinion letter is an official, written opinion by the Wage and Hour Division of how a particular law applies in specific circumstances presented by an employer, employee or other entity requesting the opinion. The letters were a division practice for more than 70 years until being stopped and replaced by general guidance in 2010.
“Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes,” says Labor Secretary Alexander Acosta. “The U.S. Department of Labor is committed to helping employers and employees clearly understand their labor responsibilities so employers can concentrate on doing what they do best: growing their businesses and creating jobs.”
The division has established a webpage where the public can see if existing agency guidance already addresses their questions or submit a request for an opinion letter. The webpage explains what to include in the request, where to submit the request, and where to review existing guidance. The division will exercise discretion in determining which requests for opinion letters will be responded to, and the appropriate form of guidance to be issued.
The Labor Department’s Wage & Hour Division (WHD) has released final regulations implementing mandatory paid sick leave for employees working on federal service, construction, and concessions contracts.
The costs are likely to come both from the paid sick leave itself (a maximum of seven days per year) and from the layers of complexity on top of contractors’ existing compliance obligations with respect to these types of contracts.
The regulations overlap with WHD’s responsibility for oversight of the Service Contract Labor Standards (commonly known as the Service Contract Act, or SCA), which is already a complicated compliance undertaking for employers.
Keep reading this article to see a summary of the highlights of the final regulations and flag issues for contractors to consider before the regulations take effect in January 2017: https://www.insidegovernmentcontracts.com/2016/10/paid-sick-leave-final-regulations-released/
Contractors hired by the Architect of the Capitol must award a total of $1 million in back pay to hundreds of cafeteria workers due to violations of the federal prevailing wage law, the Labor Department announced last Tuesday.
Restaurant Associates and its subcontractor Personnel Plus will pay 674 food servers and cooks a collective $1,008,302 because of improper job classifications that violated the McNamara-O’Hara Service Contract Act, Labor’s Wage and Hour Division said. The companies paid the workers for lower-skilled jobs than they actually performed, forced them to report for work early and failed to pay overtime at proper rates, according to the decision.
In addition, the contractors failed to pay required health and welfare benefits and violated the McNamara-O’Hara Act’s recordkeeping requirements.
Keep reading this article at: http://www.govexec.com/contracting/2016/07/labor-department-finds-senate-food-services-contractors-broke-law/130262
Following up on President Obama’s Labor Day release of an executive order requiring government contractors to offer paid sick leave to employees, the Labor Department issued proposed implementing regulations and invited comments by April 12. Contractors with service contracts should consider submitting comments, especially if they already offer paid sick leave and rely on that leave to meet their fringe benefit obligations under the Service Contract Act (SCA).
Under the SCA, contractors cannot take credit for offering benefits that they are legally required to provide. By setting a minimum required level of paid sick leave, the proposed regulations convert seven days of those benefits into legal requirements, rendering them ineligible for bona fide fringe benefit status under the SCA. Contractors would remain free to continue to account for the value of excess paid sick leave in discharging their SCA obligations, but not the base requirements. As a result, contractors may have to recalculate their fringe benefit packages by extracting the value of current paid sick leave benefits, and then offer some other offsetting bona fide fringe benefit or an equivalent cash payment. In sum, the paid sick leave executive order could have the effect of penalizing contractors who were already offering the very same benefit that the government now requires.
Keep reading this article at: https://www.insidegovernmentcontracts.com/2016/03/labor-department-invites-comments-on-regulations-governing-paid-sick-leave/
The Department of Labor (DOL) is requiring federal contractors, subcontractors and certain parties who contract with the Federal Government to provide their employees with up to 7 days of paid sick leave annually, implementing Executive Order 13706, which was signed by President Obama on September 7, 2015.
The proposed rule applies to new contracts or contract-like instruments, if:
(i)(A) it is a procurement contract for services or construction; (B) a contract covered by the Service Contract Act; (C) a contract for concessions; and (D) a contract entered into with the Federal government in connection with Federal property or lands related to offering services for Federal employees, their dependents, or the general public; and
(ii) the wages of employees under such contract are governed by the Davis-Bacon Act, the Service Contract Act, or the Fair Labor Standards Act (FLSA), including employees who qualify for an exemption from the FLSA.
DOL estimates that the proposed rule will cost each small business $150-$650 for the first year in implementation costs and payroll costs.
Comments are due to the DOL by March 28, 2016.
On February 14, 2014, President Obama issued an executive order requiring certain federal contractors and subcontractors to pay an increased hourly minimum wage as mandated by the secretary of labor, who was also to determine increases to the wage rate on an annual basis.
On September 16, 2015, the Secretary of Labor Announced that, effective Jan. 1, 2016, new minimum wages for employees of federal contractors will be increased from $10.10 to $10.15 per hour and that the rate for tipped employees will rise from $4.90 to $5.85 per hour.
What Contracts Are Covered?
Keep reading this article at: http://www.oanow.com/news/business/article_b09cf56e-5f2b-11e5-b780-d3ebd138a752.html
