Careful drafting of CBAs, particularly on service contracts, should include some attention to language expressly making any state mandated fringe benefits into a CBA contractual requirement. At least that would be prudent for a contractor looking to get a price adjustment for state mandated benefits.
Read MoreLawyers and law firms too get picked on by DOL for FLSA violations — usually misclassification, working time and overtime problems. Just because you have a law degree doesn’t mean you understand the law.
Read MoreThe SCA rules for carry forward of leave turn logic and worker rights on their head. It is like Alice in Wonderland.
Read MoreFalsifying payroll records, paying bonuses instead of premium overtime pay, and being a general scofflaw gets you double damages and civil money penalties. No Virginia, crime does not pay.
Read MoreBimbo Bakeries USA Inc. (“Bimbo”) agreed to pay monies for allegedly refusing to hire women as bakers and related occupations on their government baking contracts in violation of Executive Order 11246.
Read MoreDOL wants to annualize fringe benefit contributions, especially pension monies, to get contractors to pay Davis-Bacon Act fringe benefits even for non-Davis-Bacon Act work. This is variously called the annualization rule or the effective annual rate calculation. But some courts have refused to enforce the DOL annualization requirment.
Read MoreThe $15 Minimum Wage Executive Order (“MW EO”) only applies on or after January 30, 2022, and then only to new contracts. It doesn’t apply to the time period worked in the prior contract under the old MW EO. For that period in 2022, all that is legally due is the $11.25 MW or any higher prevailing wage. While DOL is specifying the new $15 MW was intended to apply to hours spent performing on that new contract in 2022, that just means the new contract hours. Service and construction contractors should wait patiently for the new option year, or when the new MW EO clause is added to the contract ,and get a price adjustment for any extra costs.
Read MoreGovernment contractors tend to have a “book” of existing multi-year fixed priced contracts. This means many government contractors are locked into fixed price contracts for up to the next five or so years. Those contracts were largely bid on in a low inflation world, with modest annual price escalations built-in. It is quickly becoming apparent we live in a new paradigm of higher inflation. Thus, those fixed price contractors face the prospect of either reduced profits or even losses, as inflation takes off,
Read MoreThe judgments made as to how much price escalation to load into proposals for new service work for anticipated option year increases in exempt personnel wages and fringe benefits is made more complicated and important in an era of heightened inflation expectations.
Read MoreOn November 18, 2021, President Joe Biden resurrected the Nondisplacement of Qualified Workers Under Service Contract Executive Order after President Trump revoked the Obama administration’s prior Executive Order on the same subject.
Read MoreWhen Service Contract Act (“SCA”) covered nonexempt employees work at home or an alternate work site, does the employer have to get a new wage determination (“WD”) to cover the new locale? And if that new WD has higher wages must the contractor pay the higher rate? And how is DOL enforcing the SCA for remote workers in this pandemic era? The answers are maybe and very gingerly.
Read MoreOfferors are entitled to a SCA price adjustment for increased costs incurred for vacation pay benefits during a contract renewal option period. Savvy offerors will exclude those vacation benefit costs for their bid costs in order to get a compeittive advantage. But this doesn’t work for existing employees or those hired from the predecessor contractor, who are entitled to a grant of vacation benefits in the base term of the contract.
Read MoreWhen bidding on and pricing US government extended term fixed price contracts, contractors need to price in the possibility that state minimum wages will exceed the SCA or DBA wage levels, and require an escalation be paid, but the contracting agency will not adjust the contract price for that occurrence.
Read MoreJust what you have been waiting for all your life — here is a short policy providing for the pre-payment or advanced payment of SCA vacation benefits to new workers who otherwise would have no paid leave, particularly in their first year of employment. Please note, it remains unclear whether DOL will approve of the use of such a policy, but then you are no worse off than before.
Read MoreHere is an unofficial “form”, with some minor edits and adjustments made by us, which requires subcontractors to acknowlege their obligations with repect to the prevailing wage laws. It is no panacea or substitute to good flow down of subconract terms, but in one page it does an effective job of emphasizing the duties being imposed on the subcontractor, and thus can help avoid misunderstandings or minimize inadvertent errors.
Read MoreThe following is a checklist of some best practices to follow when bidding on prevailing wage work like the Davis-Bacon Act or the Service Contract Act.
Read MoreThe Service Contract Act (“SCA”) can apply to state and local governments, including public universities performing research and other government contracts. But when it comes to those public entities, they may have a loophole to get a special wage determinaton.
Read MoreThe award of an emergency follow-on contract to a new successor contractor doesn’t change the operation of the Service Contract Act (“SCA”) Section 4(c) succcessor contractor rule. The follow-on contract is still subject to the wages and fringe benefits set forth in the collective bargaining agreement (“CBA”) entered into by the predecessor contractor.
Read MoreThe SCA bars contractors from allocating their own plan administrative expenses towards compliance with the prevailing H&W fringe benefit However, this doesn’t bar an employer from claiming a credit for the expenses borne by the benefit plan. This dichotmy sometimes produces disputes and misunderstandings. Lately, DOL has been eying a more aggressive stance on administrative expenses.
Read MoreThe child labor laws have long prohibited minors from performing time sensitive delivery services. The idea is they are too tender and inexperienced as drivers, and it is unsafe work. Recently, a pizza palor business learned that ancient taboo the hard way, with DOL imposing civil money penalties for child labor violations.
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