Service Contract Act (“SCA“) covered fixed priced contracts generally have one of two FAR clauses for price adjustments — either FAR 52.222-43 or -44. But there are different price adjustment clauses and provisions for cost reimbursement contracts. Where the SCA provisions and the standard cost reimbursement clauses overlap is in hybrid contracting, involving both fixed price and cost reimbursement CLINS. In those circumstances the overlapping price adjustment issues can be murky.
Read MoreDOL recently announced that US Marshals arrested a New York restaurateur for failure to respond to a subpoena as part of a Fair Labor Standards Act investigation. This is the second such arrest in the last few months. As I said in my blog about the first arrest - things simply go better when employers take DOL investigations seriously.
Read MoreSome disputes are not meant to be litigated in court or arbitrated. One example is job classification disputes under the Service Contract Act (“SCA”) or the Davis-Bacon Act (“ DBA”). Such disputes are committed to the exclusive jurisdiction of the U.S. Department of Labor. Only DOL is supposed to decide them and then provide for administrative appeals. Don’t let your union drag you into an arbitration of job classification disputes on service and construction US government contracts.
Read MoreJust out — a White House memorandum directing all federal contracting agencies to hire labor advisors to help coordinate with DOL and comply with the laws regarding labor and employment which pertain to federal procurements. This includes especially the Service Contract Act and the Davis-Bacon Act, but also many other labor requirements and Executive Orders.
Read MoreBack in August 2022, I was puzzled by the small annual increase in the Service Contract Act (“SCA”) health and welfare rate which jumped by only 5%. At that time raging inflation was exceeding 8%-9%. Now I think I have some idea of what was going on. The CPI was overestimating the health insurance inflation.
Read MoreDOL publishes a Notice on the Federal Register listing the new Federal Contractor Minimum Wage rates starting January 1, 2023.
Read MoreDOL allows federal contractors to take a credit for the costs of their unfunded, self insured fringe benefit plan towards their SCA fringe benefit obligation as long as the plan is approved by DOL.
Read MoreNo Davis-Bacon Act price adjustment claims are allowed if the contract has a clause that requires wage and fringe benefit escalations be priced into the option year quotes.
Read MoreThe Department of Labor expands coverage of the Service Contract Act to another traditionally uncovered contract.
Read MoreOn June 23, 2022, the U.S. Department of Labor issued its annual memo that sets health and welfare (“H&W”) fringe benefit rates for Service Contract Act (“SCA”) covered contracts. Over the last few years, the rates have barely moved an inch. This year, the rates are going up by about 4%.
Read MoreSometimes the wage and hour regulations cannot be taken literally. Instead, you need to figure out the regulatory intent. For example, the SCA and DBA regulations bar the employer from claiming a credit for paying social security, worker’s comp and unemployment premiums. These tax like payments are not fringe benefits. But other federal and state mandated benefit plans like Obamacare, Romneycare in Massachusetts, holidays, and leave are fringe benefits and can be credited towards compliance.
Read MoreA recent Maryland case demonstrates how state law can supplant federal law with respect to wage and hour obligations. Federal contractors must be vigilant to avoid getting caught in this sometimes quite tangled web.
Read MoreDOL issues a proposed rule regarding the Nondisplacement of Qualified Workers Executive Order.
Read MoreThe Director of Defense Pricing and Contracting recently issued a memo to guide contracting officers in response to the impacts of inflation on federal contracts. Read on to find out how there’s some hope for future contracts, but little relief for contractors who hold existing fixed-price contracts.
Read MoreCareful 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 MoreThe SCA rules for carry forward of leave turn logic and worker rights on their head. It is like Alice in Wonderland.
Read MoreA U.S. District Court judge holds that a contractor had not received final agency action to allow an Administrative Procedure Act suit. Thus a challenge to DOL’s determination that the Service Contract Act applies to cooperative agreements is not ripe for appeal.
Read MoreFrom time to time, I see a government contracts case that sends chills down my spine. A recent decision painfully reminds me of how the law governing our unique parcel in the vast lands of the legal world is rife with hard-to-see pools of quicksand that can trap even the most sophisticated contractors.
Read MoreThe Department of Labor announced yesterday the Wage and Hour Division plans to hire 100 investigators this year. For sure, they’ll be earnest and energized. That’s why a solid grounding in the wage and hour laws affecting the government contractor community will be a powerful tool to ensure you get a fair shake.
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.
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