In addition to minimum wage rates, contractors must also provide their employees with extensive health insurance or pay a specific rate for benefits (currently $2.56 per hour). This additional hourly allowance must be paid on all paid hours, hours of work, paid leave and vacation pay. The employer must also pay payroll taxes on benefit payments, which can make the employer`s contract uncompetitive. Conversely, paying directly to an insurer by the contractor or participating in a group health care plan has tax advantages, as it could be deducted from input tax to reduce tax costs for both the contractor and the employee. If the entrepreneur contributes to a health care plan, these contributions may vary from one employee to another depending on his family and professional status. In addition, in the case of a direct contribution plan, the average contributions must meet or exceed the specified marginal benefit rate. This law was promulgated in 1966, amended in 1976 and is administered by the Ministry of Labour through its Department of Wages and Hours. This legislation was passed to ensure that service workers hired for federal governments are paid as much as the applicable on-site rates for the same work. The law can be cumbersome for old and new companies in the industry. However, reviewing FCC requirements early in the procurement process can help avoid future problems.

Based on “fixed cost” performance requirements (i.e., Odd wage determinations), an employee must receive H&W for these vacation hours each time they take a leave, provided they do not exceed the H&W maximum of a maximum of 40 hours per work week. In contrast, under average cost requirements (i.e., single-number payroll settlements), employees do not earn H&W dollars for the vacation hours they take. Note, however, that H&W dollars are not earned for either type of contract if the employer simply pays out an unused vacation credit earned for any of the above reasons (for example, . B next birthday, conclusion of contract or termination of employment). In addition to the hourly base salary and the additional H&W component, SCA employees also receive vacation pay in an amount that depends on the respective WD. For example, it is not uncommon for a WD to require one (1) week of paid leave for new CAS employees. DeO lists the number of vacation days that must be made available to SCA employees. The number of vacations earned increases each year based on the length of employment of an FCC employee under the contract (without interruption of operation). This includes the time they have spent with previous contractors who have performed similar functions in the same facility. According to the DOL, this “does not require the contractor to combine two separate periods of employment. In general, no interruption of service has occurred if the employee is on leave with or without pay, if he or she is absent with the employer`s permission for reasons such as illness or injury, or if he or she is not performing work due to circumstances beyond his or her control. 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. The FCC does not apply to certain types of contractual services. Contracts exempt from SCA coverage include: Contract Compliance – an alliterative term that you are probably very familiar with as a Schedule GSA contractor. We know this seems like a lot to follow, so let`s break it down into three main sections. Federal contractors must understand the contracts they offer and win, and pay particular attention to whether the contract is considered an SCA contract. Sometimes the government agency`s contracting officer will inform you of the CAS`s obligations, and sometimes the contractor will simply defer to themselves whether the contract is covered by the FCC. It is not uncommon for entrepreneurs to discover in a few years that they would have had to pay SCA salaries and benefits for a particular contract.

Don`t let this happen to your business. Financial penalties for non-compliance can be high, and intentional non-compliance with CAS requirements can result in exclusion. If you are unsure whether the FCC applies to one or more of your company`s federal service contracts, contact your contract agency or prime contractor for more information. To further confuse matters, not all “service” contracts are subject to the requirements of the FCC. . . .