There are thousands of government contractors who hold SCA contracts, yet so many of them are confused about the requirements. It’s understandable; the requirement guidelines are complicated and difficult to navigate. As an HR Consultant, I often interpret the guidelines for many of our clients to ensure they are in compliance. Here are a few tips to help clarify some of the most frequent misunderstandings I have heard:
- All non-exempt employees on an SCA Contract must be mapped to the Wage Determination (WD).
- Slot employees based on their actual duties.
- If the job classification is not available on the WD, contractors must request a conformance with a proposed rate for the labor category.
- Use the Wage Determination (WD) provided in the contract. If the WD needs to be updated, work with your Contracting Officer to get a contract modification before applying a new or different WD.
- You should post the WD in a prominent place at the worksite.
Vacation and Holidays
- Read the Fringe Benefits section following the Occupational Listing. Different WD’s, even on the same contract, may have different Health & Welfare, Vacation, and Holiday requirements.
- Incumbents are due vacation based on the length of service as per the WD. Length of service is the length of service with the predecessor contractors in the performance of similar work at the same Federal facility, not just the length of service with you as the new contractor. If you are taking over an SCA contract with incumbents, the predecessor contractor is required to provide you with a list of incumbents and their length of service so you can determine the accurate vacation due to each incumbent.
- Vacation is vested on the employee’s anniversary date and must be used or paid out by the next anniversary date. The SCA does not allow carry over vacation even if your normal company policy does.
- Part-time employees are entitled to pro-rated vacation and holidays.
- Temps and independent contractors are entitled to a vacation and holidays or cash equivalent.
Health & Welfare
- You can meet the Health and Welfare requirements by providing bona fide fringe benefits or cash equivalent; however, talk to your benefits broker to find out how the Affordable Care Act will affect this practice.
- You cannot offset an hourly rate paid in excess of what is required under the WD in order to satisfy fringe benefit obligations.
- If you are self-insured, make sure you meet the minimum requirements and get your plan approved by the DOL. It is recommended to set aside assets in an escrow account to ensure those funds are spent on bona fide fringe benefits.
Are you meeting all of these requirements? It’s ok to say no; you are not the only one. Now that you know though, make sure you are in compliance with your SCA Contract before the DOL comes knocking on your door. It’s critically important that HR, Finance & Accounting, Proposals, Contracts, and your Program Managers are all familiar with the requirements of the Act. For further peace of mind, consider hiring a third party specialist to perform a compliance audit to get you on track to meet all of your government contracting requirements.