Who Is Exempt from Service Contract Act

The McNamara-O`Hara Service Contract Act of 1965 (SCA) continues to challenge government contractors, including new and experienced players in the industry. We found that a thorough review of the FCC`s requirements in the pre-award phase can help avoid problems in the performance of the contract. To this end, we have prepared a summary of the issues that contractors should consider when bidding for a contract covered by the FCC. However, due to the complexity of the SCA and its implementing rules, this summary is intended only as a general guide and not as a substitute for an in-depth factual analysis of a particular opportunity covered by the SCA. This could be interpreted as an exception that includes many careers classified as professional services. This means that the Service Contracts Act may not apply to certain professional services jobs. Contractors and subcontractors can challenge findings of violations and exclusion before an administrative judge (ALJ). Interested parties may appeal the ALJ`s decisions to the Ministry`s Administrative Review Board. The Council`s final decisions on violations and exclusion can be challenged in federal courts and are enforceable.

Recently, I had a client who believed that if a particular job title was not included in the salary provisions associated with the contract, that position would be exempt from the provisions of the Service Contracts Act, particularly the required health and social benefits. Surprisingly, this is not the case, and the purpose of this article is to explain how government contractors can determine whether an employee is considered exempt from the requirements of the Service Contracts Act (CAS). If there are more employees insured by SCA, the cost of a contractor`s overtime and SCA benefits may increase. If your contract contains the clause in Federal Procurement Regulation 52.222-43 “Act respecting fair labour standards and labour standards for service contracts – Price adjustment (multi-year and optional contracts)”, you may be able to obtain a price adjustment. However, there are defenses that the government is likely to claim. On the other hand, contractors can argue that requiring all these additional workers to be covered by the SCA is a change to the contract that would entitle them to even broader relief. Violations of the FCC may result in the withholding of contractual payments in sufficient quantities to cover salary and marginal ancillary payments, termination of the contract and liability for the resulting costs to the government, legal action to recover insufficient payments, and exclusion of future contracts for up to three years. Officers, directors and professionals who are exempt from the RSA are also exempt from the FCC. These employees do not have to receive current wages, social and health benefits, as well as paid leave and vacation.

By specifying who is exempt from the RSA, the LOL has automatically expanded who is covered by the FCC. In particular, front-line superiors who have already qualified for an executive or administrative exemption, as well as junior scientists and nurses who have already qualified for a professional exemption may be affected. In addition, workers who are employed part-time, who share a job or who work sporadically may no longer be considered exempt because they do not meet the new wage threshold. (1) Underpayment of military personnel due to incorrect classification. (2) Wrongly, employees are exempted without regard to the rules of Part 541 of 29 C.F.R. (3) Unfair payment of wages or benefits. (4) Lack of appropriate records for cash payments to meet ancillary benefit requirements. (5) Failure to inform service employees of the applicable compensation and ancillary service requirements or to place the “Notice to Employees Working on Government Contracts” in a conspicuous and accessible location on the construction site. (6) Non-use of the conformity procedure for categories of workers not listed. (7) Failure to separate and keep records of hours spent on temporary agency and non-contract work for workers performing both. (8) Failure to make salary increases in the context of a new salary determination under a multi-year contract with annual means.

The DOL provides an automated method for accurately calculating SCA price adjustments specifically designed to streamline the price adjustment process and schedule. The application is called price adjustment calculation tool (PACT). “It consists of a format for contractors to submit their price adjustment proposals (the FSB) and a government component that calculates contract specialists and helps analyze proposals for accuracy, lawfulness and consistency.” PACT is an award-winning rationalization program developed by the Navy and implemented on WDOL through the integrated acquisition environment. an e-commerce initiative within the framework of the Office of Management and Budget. Naval Research Laboratories has filed a patent application (publication number: 2010-0179898) and all rights are delegated to the Minister of Marine. For all non-exempt SCA insured employees, contractors must identify the specific work tasks that each employee will perform under the contract or subcontract and “assign” those tasks to an appropriate DoL wage-setting work category to determine each employee`s SCA minimum wage. In some cases, government appeal documents (or even previous classifications of the predecessor contractor) may contain references to the appropriate work class, but keep in mind that the contractor is ultimately responsible for selecting the appropriate work class and is responsible for the effects of an inaccurate assignment. The CAS mapping process generally includes the following steps: Employers must inform employees working under the contract of the compensation to which they are entitled under the wage and benefits provisions of the contract. The McNamara-O`Hara Service Contract Act (SCA) covers contracts entered into by federal and District of Columbia authorities whose primary purpose is to provide services in the United States. through the use of “service employees”. The definition of “service employee” includes any employee who provides services under a covered contract, other than a bona fide employee of management, administration or a professional who meets the exemption criteria set out in Part 541 of 29 CFR.

The FCC allows an employer such as the RSA to pay employees with disabilities a special minimum wage for the work to be performed, which is lower than the applicable wage required by the wage establishment. Order 29 C.F.R. §4.6(o) instructs the employer to follow the same “conditions and procedures” required for the employment of employees with disabilities under section 14(c) of the RSA. However, this exception applies only to the salary in force. Employers are still required to pay employees with disabilities full benefits or equivalent cash payment instead of providing benefits for the work performed. While this discussion focuses on pre-award and pricing considerations, contractors should also remain vigilant when moving from pre-award to performance under contracts covered by sca. During performance, Contractors must (i) ensure that they pay fair wages and ancillary benefits, (ii) monitor compliance with the SCA by their subcontractors, (iii) verify whether revised wage regulations have been published by the DoL and included in the contract by the contract agent in the exercise of options, or as otherwise required by the SCA and its implementing rules; and (iv) continuously assess whether changes to the employment contract or service description of the subcontract require new categories of work, or whether changes to employees` work items require a revised analysis of coverage, work category assignments or updated performance locations. While SCA can certainly present many challenges at all stages of the contracts covered by the SCA, there is simply no substitute for early identification and assessment of how a contractor intends to address these challenges.

(3) Each service employee who provides the services under the contract will spend only a small portion of his or her time (monthly average of less than 20% of the hours available on an annualized basis or less than 20% of the hours available during the term of the contract if the duration of the contract is less than one month) serving the government contract; and With respect to price developments under a contract covered by the SCA, contractors should consider the following: As an indication, the SCA does not apply to specific contracts, so it is important to first determine whether the SCA is applicable to the contract in question. This blog post will not discuss contract exemptions and will instead focus on exceptions for employees. For more information about contract exemption, see this SHRM article on SCA compliance. Wage Determinations OnLine provides a single place where federal contractors can obtain the appropriate wage provisions from the SCA and Davis-Bacon Act (DBA) for any formal contracting law. The site is also open to the general public. Instructions on how to select salary determinations can be found on this website in the Online User Manual for Salary Determinations. This website provides step-by-step instructions on how to comply with CAS requirements. See Compliance under the Service Contracts Act. Scope – This toolkit provides an overview of the McNamara-O`Hara Service Contract Act (SCA), which applies to employers who provide services to federal and District of Columbia agencies through service employees. Please seek legal advice for clarification on your own professional services organization. .