Source: http://www.aximfsg.com/government-contractors-guide-service-contract-act-sca-compliance/
Timestamp: 2017-07-25 16:47:28
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Government Contractor's Guide to Service Contract Act Compliance
Fringe Solutions Group
Axim Overview The Government Contractor’s Guide to Service Contract Act (SCA) Compliance
Compliance Management - - Would you be 100% compliant if audited by the DOL?
Know Your Stuff- take some time to figure out how you are doing your compliance, and be sure that you are meeting the correct standards in the allotted amount of time.
Make Corrections- In compliance reporting, making a mistake is not necessarily wrong, but not correcting it is. When you find errors, making them right will save you in the long run.
Pricing - Are you maximizing your fringes to build better rates and win more bids?
Labor Categories - Are your employees correctly classified under the contract?
The DOL can also make compliance violations hurt is during the bidding process for future contracts. Compliance violations follow you around for three years. It's become a significant factor in determining contract award status. Essentially, a few misclassifications can give your entire government contracting efforts a gloomy outlook.
Base Wages - Are you paying proper wage rates by classification?
Base wages are calculated on the idea that a worker’s pay should reflect the cost of living in that area. So changing locations can complicate things. In some situations, there are even "invisible borders" within cities that will change wage rates on top of county and state lines.
Taking that one step further, if your company adds a new office, a new warehouse, or an employee starts working from home... that changes their location and thus, their base wage could change as well.
Fringe Rate - Are you providing workers the correct fringe rate?
A common mistake contractors make regarding fringe rates is that they believe it's "locked in" (static) by the contract. The SCA guidelines are VERY clear about this. Contractors should almost always be paying whatever the current fringe rate is.
The only way a contractor wouldn't need to update their contract is if they were given expressed written permission (DOL). Without the contract officer's go-ahead, paying a lower fringe rate is unacceptable. Furthermore, in re-bidding situations, if you're not paying current fringe rates... that's the kind of thing that gets held against you. It might even prevent you from keeping your contract.
Subcontractor Compliance - Who's responsible for a subcontractor's compliance?
In govcon, using subs is almost as unavoidable as death and taxes. However, smart contractors know using subs can help speed up projects, perform intricate tasks, or simply do the things that you don't want to do yourself. Not to mention the fact it's a great way to save on costs.
The Service Contract Act (SCA) states it's the responsibility of the prime contractor to ensure that "every single worker" that set foot on the job (including subcontractors) were paid the correct wage and fringe rate as set by the contract regardless of who the employee works for.
If a subcontractor is found to be in non-compliance (DOL audit), the prime contractor is at fault. They take the performance record hit along with back wages and/or additional penalties. In other words, prime contractors better ensure their subs are compliant because it's their butts on the line.
There's also the additional administrative burden on your staff to review the subcontractor’s compliance ensuring it's been done properly. What we hear from government contractors all the time is that their compliance is the worst part of using them as a sub.
Cash Fringes - Nothing stays the same forever
Cash fringes are an "easy way" to handle your compliance reporting compared to providing fringe benefits. It takes little time and resources on behalf of the contractor.
However, they pay a lot for that simplicity and ease. Cash-in-lieu of benefits also increases a contractor's tax burden (FICA, Workers Compensation, and other taxes). A simple, but expensive solution in a landscape where profit margins are shrinking.
Fringe Benefits - Is your benefits package competitive enough to attract and retain skilled workers?
For example, let's say you provide cash fringe instead of benefits and one of your employee's purchases health care coverage on their own. You may be found in non-compliance for not providing the correct minimal amount of health care coverage under ACA guidelines.
Government Contracting SCA Compliance Checklist #govcon from Jim Campbell Three Common Service Contract Act Compliance (SCA) Stumbling Blocks How Cash-in-lieu Opt-Outs Increase Costs for Federal Contractors The Government Contractor’s Guide to Service Contract Act (SCA) Compliance How “No Change” to the SCA Health & Welfare Benefit Rate Impacts Government Contractors SCA Compliance Checklist Part 8: Fringe Benefits SCA Compliance Checklist Part 7: ACA Compliance SCA Compliance Checklist Part 6: Subcontractor Compliance SCA Compliance Checklist Part 5: Fringe Rate SCA Compliance Checklist Part 4: Base Wages SCA Compliance Checklist Part 3: Labor Categories Design + Development by Web Mobile Image