Georgia Tech Procurement Assistance Center

Atlanta FRB: Small firms face challenges to find workers

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Amid a largely positive Beige Book report by the Federal Reserve Bank (FRB) on economic conditions in the Southeast, some small businesses report particular challenges competing with larger companies for a dwindling pool of available workers.

Across the board, businesses continued to report pressure to increase wages for low-skill, hourly jobs, notably in the hospitality and retail industries. That’s good news for workers.

But the January 16 report notes, “Challenges with escalating wage pressure were especially acute among small businesses.”

Growing numbers of Americans are switching jobs, according to the U.S. Bureau of Labor Statistics.  In that context, the past few Beige Book reports have captured a powerful focus on retaining employees in a tight labor market. The latest Beige Book includes a couple of newer nuggets:

  • The particular challenges facing smaller employers, and reports from a few contacts in construction, manufacturing, and health services that they are overstaffing certain jobs to prepare for anticipated growth, figuring it will be difficult to find people in the coming months.

Even as many confront hiring challenges, retailers across the Sixth Federal Reserve District reported steady holiday sales. Not surprisingly, online sales grew faster than those at traditional stores.  Travel and tourism contacts also reported growth in business and leisure travel.

In other sectors:

  • Companies reported input costs kept climbing, especially for products affected by tariffs.  So far, most firms report passing along tariff-related price increase with no serious impact on profit margins.
  • Demand for renewable power continued to grow compared to electricity generated by coal, gas, or nuclear plants.
  • In many parts of the district, sales of existing homes were flat or declined. Home construction is lagging demand, as builders focus on higher-priced houses in popular submarkets.
  • Commercial real estate reports were generally upbeat. Vacancy rates continued to decline, fueled by the industrial, multifamily, and medical sectors. In fact, demand for industrial space, such as big distribution centers, continues to exceed supply. However, contacts reported ongoing concerns about bankruptcies and generally difficult conditions among traditional big-box retailers.
  • Cargo shipments were up among contacts at seaports, air freight haulers, and railroads. Logistics firms reported higher volumes of packages delivered during the holidays compared to the previous year.
  • Financial institutions generally reported that conditions held steady.  Higher interest rates boosted net margins at most banks, while growth in loan volumes continued but at a slower pace, especially in real estate.  While measures of loan quality stayed mostly strong, some lenders noted increases in late payments by consumers.
  • In the farming business, the U.S. Department of Agriculture designated counties in Alabama, Florida, Georgia, and Mississippi as natural disaster areas because of damages and losses from hurricanes and flooding.

Source: https://www.frbatlanta.org/economy-matters/regional-economics/beige-book/2019/01/16/beige-book-small-firms-face-challenges-to-find-workers

The lineman got $63 an hour — the utility was billed $319 an hour

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The small energy outfit from Montana that won a $300 million contract to help rebuild Puerto Rico’s tattered power grid had few employees of its own, so it did what the Puerto Rican authorities could have done: It turned to Florida for workers.

For their trouble, the six electrical workers from Kissimmee are earning $42 an hour, plus overtime. The senior power linemen from Lakeland are earning $63 an hour working in Puerto Rico, the Florida utility said. Their 40 co-workers from Jacksonville, also linemen, are making up to $100 earning double time, public records show.

But the Montana company that hired the workers, Whitefish Energy Holdings, had a contract that allowed it to bill the Puerto Rican public power company, known as Prepa, $319 an hour for linemen, a rate that industry experts said was far above the norm even for emergency work — and almost 17 times the average salary of their counterparts in Puerto Rico.

A spokesman for Whitefish, Chris Chiames, defended the costs, saying that “simply looking at the rate differential does not take into account Whitefish’s overhead costs,” which were built into the rate.

“We have to pay a premium to entice the labor to come to Puerto Rico to work,” Mr. Chiames said. Many workers are paid overtime for all the time they work. Overtime pay varies by type of worker, union membership, mainland utility company and many other factors.

Keep reading this article at: https://www.nytimes.com/2017/11/12/us/whitefish-energy-holdings-prepa-hurricane-recovery-corruption-hurricane-recovery-in-puerto-rico.html

Contractors group files suit against ‘Fair Pay and Safe Workplaces’

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President Obama’s long-controversial Fair Pay and Safe Workplaces rule — set to take effect Oct. 25 — is being challenged in district court by the Associated Builders and Contractors (ABC), one of several contractors associations that oppose the rule as costly and burdensome.

DOLIn a suit filed Oct. 7 in the U.S. District Court for the Eastern District of Texas, the associated builders and its Southeast Texas Chapter argued that the Labor Department rule finalized in August and intended to protect low-wage workers from abuses such as wage theft is a “blacklisting” rule that forces contractors to report “alleged violations,” thus harming their prospects for winning government work.

“The Obama administration has exceeded its authority by forcing government contractors and prospective government contractors to publicly disclose mere accusations that they have violated labor and employment laws,” said Associated Builders and Contractors Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “ABC supports policies that provide value to taxpayers by ensuring that federal contractors compete on a level playing field, but this rule will require contractors to report alleged violations that have not been fully adjudicated and are being contested, which violates their first amendment and due process rights and is likely to harm fair and open competition in the federal marketplace.”

Keep reading this article at: http://www.govexec.com/contracting/2016/10/contractors-group-files-suit-against-fair-pay-and-safe-workplaces/132243

5 steps to compliance with the fair pay and safe workplaces rules

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The much-anticipated so-called federal contractor “blacklisting” rules and guidance (“Final Rule” and “Guidance”) were published in the federal register on August 25, 2016. The Final Rule becomes effective on October 25, 2016 and imposes four new legal obligations on covered federal contractors, which will be phased in over the next year (starting as early as October 25, 2016).

It is important to also note that this is being phased in via Federal Acquisition Regulation (“FAR”) solicitation and contract provisions. This means that the Final Rule “becomes effective” by beginning to appear in new solicitations issued on or after October 25, 2016. This should not dampen a company’s concern and speed of progressing through the steps below and determining and pursuing compliance, but it is critical to understand and follow the specific path of obligation.

  • First, federal contractors will have to disclose “labor law decisions” both before and after contract award. The federal government will use these disclosures in making their “responsibility” determinations – the determination of whether the contractor is a responsible source to whom a contract may be awarded.
  • Second, contractors must give a wage statement to employees containing for each workweek the number of hours worked, the number of overtime hours, rate of pay, and additions to and from gross pay, and total gross pay.
  • Third, contractors must provide written notice to independent contractors informing them that they are independent contractors and not employees.
  • Fourth, contractors can no longer enter into agreements with employees or independent contractors that require arbitration of claims under Title VII of the Civil Rights Act (includes discrimination and retaliation claims based on race, color, religion, sex and national origin) or sexual harassment claims.

Federal contractors will need to become quick studies of the Final Rule and Guidance in order to begin developing procedures to ensure compliance as these requirements phase in over the next year.

Keep reading this article at: http://www.directemployers.org/2016/09/20/five-steps-compliance-fair-pay-safe-workplaces-final-rule/

Federal contractor paid sick leave regulations finalized

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paid-sick-leave-regulations-oct-2016The 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/

Contractor to pay government upwards of $675,000 for failure to pay proper wages

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Justice Dept. sealGovernment contractor Paige Industrial Services, Inc. has agreed to pay the United States between $450,000 and $675,000 to resolve allegations under the False Claims Act that the company submitted false claims to the Department of Health and Human Services.

In a related parallel criminal proceeding involving a Paige subcontracting company, construction company owner Luis Alonso Valle, age 46, of Silver Spring, Maryland, pleaded guilty on February 11, 2016 to an illegal pattern and practice of hiring unauthorized aliens.

This settlement resolves allegations that Paige Industrial Services submitted claims from 2006 to 2013 falsely certifying that it had complied with the Davis-Bacon Act.  The Davis-Bacon Act required Paige to pay certain prevailing wages and fringe benefits to its employees, or the employees of its subcontractors, while working under a government contract performing construction at the National Institute of Health (NIH) campus in Bethesda, Maryland.  Paige, which provided construction and maintenance services to government agencies, allegedly failed to meet the requirements of the statute while certifying that it had.  Paige denies the allegations.

“Contractors are required be truthful in their certifications to federal agencies,” said U.S. Attorney Rod J. Rosenstein.

“This office is committed to investigating allegations of fraud involving the Davis-Bacon Act, which requires that contractors and subcontractors pay prevailing wages to their workers on government projects,” stated Acting SAC John Dolce, U.S. Department of Labor’s Office of Inspector General – Washington Regional Office. “The joint criminal and civil resolutions announced today reflect the seriousness with which our agency and its law enforcement partners pursue allegations of wrongdoing that affect the American workforce.”

As part of the settlement, Paige has agreed to make additional payments above a minimum settlement payment of $450,000, depending on the financial performance of the company over the next five years.

The civil settlement resolves a lawsuit filed in the District of Maryland under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. (U.S. ex rel. Brandon Owens and Stevan Reba v. Gilbane, Inc, Gilbane Building Company, Inc, and Paige Industrial Services, Inc.) The claims resolved by this settlement are allegations only, and there has been no determination of liability.

In a related parallel criminal proceeding, Valle Services, LLC., was a subcontractor to Paige at the NIH campus in Bethesda.  According to his plea agreement, Luis Valle owned and operated Valle Services, a construction company that provided unskilled laborers to clean up after demolition projects.  From at least January 2010 to June 2013, Valle paid some of his employees by handwritten checks without withholding required payroll taxes of at least $54,641.  Additionally, Valle failed to pay a matching employer share of the payroll tax of at least $54,641.  These wages were not included on W-2 forms distributed to the employees at the end of the year.

Furthermore, from March 2008 to August 2013, Valle hired at least 19 illegal aliens to work in the United States, and paid them weekly through checks that he typically distributed in person from his vehicle at a parking lot.  Valle approved the hiring of at least five of the illegal aliens to work on a federal contract at the Bethesda NIH campus, which contract was subject to the provisions of the Davis-Bacon Act.

U.S. District Judge Paul W. Grimm sentenced Valle on February 11, 2016 to three years’ probation and imposed the condition that Valle not employ any unauthorized aliens.  Judge Grimm also entered an order that Valle forfeit $57,000, which represents a $3,000 fine for each of the 19 unauthorized aliens that he illegally hired.

Source: http://www.justice.gov/usao-md/pr/paige-industrial-services-agrees-resolve-false-claims-act-allegations

Labor Dept. to require paid sick leave for workers of federal contractors

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Dept. of LaborThe 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.     

 

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