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U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

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Page 1: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborWage and Hour Division

2011 McNamara – O’Hara Service Contract Act

Webinar for Contracting Officials

Page 2: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborWage and Hour Division

Presenters

William Brooks, Senior Compliance Specialist, U.S. Department of Labor

Sandra Hamlett, Branch Chief, U.S. Department of Labor

Kyle Roberts, Labor Advisor, United States Air ForceMahruba Uddowla, Procurement Analyst, General

Services Administration

Page 3: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Internet SitesWage Determinations – http://www.wdol.gov

Wage and Hour Division - http://www.dol.gov/whd

Office of the Administrative Law Judges Law Library - http://www.oalj.dol.gov

Administrative Review Board - http://www.dol.gov/arb

Debarred Bidders List - http://www.epls.gov

Page 4: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Code of Federal Regulations29 CFR Part

1 - Procedures for Predetermination of Wage Rates under the Davis-Bacon Act

3 - Payment & Reporting of Wages on Federal Construction Contracts

4 - Federal Service Contracts

5 - Labor Standards Provisions Applicable to Federal

Construction Contracts

6 - Rules of Practice for Administrative Proceedings

Page 5: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Code of Federal Regulations29 CFR Part

7 & 8 - Rules for DBA/SCA appeals before the ARB

525 - FLSA (Workers with Disabilities)

531 - FLSA (Credit for tips, meals, & lodging)

541 - FLSA (Exempt - Salaried employees)

778 - FLSA (Overtime)

785 - FLSA (Hours Worked)

Page 6: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Labor Standards Statutes

The Davis-Bacon Act (DBA)

Davis-Bacon and Related Acts (DBRA)

Contract Work Hours and Safety

Standards Act (CWHSSA)

Copeland “Anti-Kickback” Act (CA)

Walsh-Healey Public Contracts Act (PCA)

McNamara-O’Hara Service Contract Act (SCA)

Page 7: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Legislative History and Purpose

SCA became effective in January 1966

SCA was amended in 1972 and 1976

It is the most recent of government contract labor standards laws administered by the Wage and Hour Division (WHD)

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Page 8: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA LegislativeHistory and Purpose

To “close the gap” in labor standards protection for service contracts subject to SCA and contracts subject to PCA and DBA

To remove wages as a bidding factor in the competition for Federal service contracts

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Page 9: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Requirements (29 C.F.R. § 4.6)

Contracts in excess of $2,500 must contain labor standards clauses and:

Minimum monetary wages and fringe benefits determined by Department of Labor (DOL)

Recordkeeping - Posting requirements

Safety and health provisions

Statement of rates paid to federal employees

Page 10: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Requirements (cont’d.)

Payment of FLSA minimum wage for contracts of $2,500 or less, or contracts exceeding without wage determination:

FLSA Minimum Wage:

Effective July 24, 2009 = $7.25

Page 11: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Coverage Elements (29 C.F.R. §§ 4.107, 4.108 & 4.110)

Contracts entered into by Federal Government and District of Columbia

Contracts principally for services

Contracts performed in the U.S.

Contracts performed through the use of service employees

Page 12: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Federal Contracting Agencies(29 C.F.R. §§ 4.107 & 4.108)

Agencies or instrumentalityDepartment of Defense (DOD)

Wholly owned corporations of the Government U.S. Postal Service

Non-appropriated fund activitiesMilitary post exchanges (PX’s)

Contracts entered into byDistrict of Columbia

Page 13: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Contracts to Furnish Services(29 C.F.R. §§ 4.111 & 4.130)

Examples of service contracts:

Security and guard services

Janitorial services

Cafeteria and food services

Support services at Government installations

Page 14: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Contracts “in the US” (29 C.F.R. § 4.112)

50 States, the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf, American Samoa, Guam, Wake Island, Johnston Island, and the Northern Marianas (Canton Island, Eniwetok Atoll, and Kwajalein Atoll are no longer a part of the United States)

Any portion of a contract principally for services performed in the United States is covered

Page 15: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Use of “service employees”(29 C.F.R. § 4.113)

Section 8(b) of SCA defines service employee as:

Any person engaged in performance of contract, except

Employees who qualify for exemption as bona fide executive, administrative or professional employees under the FLSA (29 C.F.R. Part 541)

Employee coverage does not depend on contractual relationship (29 C.F.R. § 4.155)

Page 16: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Three Tests for 541 Exemption

Salary Level

Salary Basis

Job Duties

Page 17: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Salary Basis Test Regularly receives a predetermined amount of

compensation each pay period (on a weekly or less frequent basis)

The compensation cannot be reduced because of variations in the quality or quantity of the work performed

Must be paid the full salary for any week in which the employee performs any work

Need not be paid for any workweek when no work is performed

Page 18: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Minimum Salary Level: $455

For most employees, the minimum salary level required for exemption is $455 per week

Must be paid “free and clear” The $455 per week may be paid in equivalent

amounts for periods longer than one weekBiweekly: $910.00Semimonthly: $985.83Monthly: $1,971.66

Page 19: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Administrative Duties

Primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers

Primary duty includes the exercise of discretion and independent judgment with respect to matters of significance

Page 20: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Professional Duties

Primary duty is the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction

Primary duty is the performance of work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor

Page 21: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Executive Duties

Primary duty is management of the enterprise or of a customarily recognized department or subdivision

Customarily and regularly directs the work of two or more other employees

Authority to hire or fire other employees or recommendations as to the hiring, firing, advancement, promotion or other change of status of other employees given particular weight

Page 22: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Contracts Not SCA Covered(29 C.F.R. § 4.134)

Contracts primarily for something other than services, e.g., construction

Contracts for leasing of space

Contracts for professional services

Federally-assisted contracts for services entered into by state governments, e.g., Medicaid and Medicare programs

Page 23: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Statutory Exemptions

Page 24: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Statutory Exemptions(41 U.S.C. § 356)

SCA does not apply to the following:

Contracts for construction of public buildings or public works covered by DBA

PCA work required by contract – e.g. manufacturing or supplies

Contracts for carriage of freight or personnel where published tariff rates are in effect (excluding mail haul contracts)

Page 25: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Statutory Exemptions (cont’d.)

Contracts for services of communications companies (e.g., radio, telephone) subject to the Communications Act of 1934

Contracts for public utility services, including electric light and power, water, steam, and gas

Employment contracts providing for direct services to a Federal agency by individuals

Contracts with the U.S. Postal Service for operation of postal contract stations

Page 26: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Authority to Grant Exemptions(41 U.S.C. § 353(b)(3))

Necessary and proper in the public interest or to avoid serious impairment of government business; and

In accord with remedial purpose to protect prevailing labor standards

Page 27: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

“Workers with Disabilities”(29 C.F.R. § 4.6(o))

Contractors who obtain FLSA “section 14” certificates for SCA workers:

Permitted to pay less than prevailing wage

Must pay prevailing fringe benefits

Health and welfare benefits in full

Vacation and holiday benefits based on “commensurate rate” and hours worked

Page 28: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Apprentices and Trainees

Apprentices and trainees are permitted to work at less than the SCA predetermined rate for the work they perform when individually registered in a:bona fide apprenticeship program registered with

a State apprenticeship agency that is recognized by the DOL, or

under a program registered with the DOL’s Employment Training Administration Office of Apprenticeship.

Page 29: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Regulatory Exemptions

Page 30: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Regulatory Exemptions(29 C.F.R. §§ 4.123(d)-(e))

SCA does not apply to the following:

Postal Service contracts with common carriers

Postal Service mail contracts with owner- operators (i.e., individuals, not partnerships)

Certain items for “commercial services”

Page 31: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

“Commercial Services”(29 C.F.R. § 4.123(e)(1))

Contracts and subcontracts for maintenance, calibration, and repair of:

ADP & office information/word processing systems

Scientific & medical apparatus or equipment where the application of microelectronic circuitry or other technology of at least similar sophistication

Office/business machines where services performed by supplier or manufacturer

Page 32: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

“Commercial Services”(29 CFR 4.123(e)(2))

For the following seven services:

Maintenance and servicing of motorized vehicles owned by Federal agencies

Issuance and servicing of credit, debit, or similar cards by Federal employees

Lodging, meals, and space in hotels/motels for conferences

Page 33: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

“Commercial Services” (cont’d)

Real estate services

Transportation on regularly scheduled routes

Relocation services

Maintenance services for all types of equipment obtained from manufacturer or supplier under a “sole source” contract

Page 34: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

“Commercial Services”Criteria to Apply Exemption

Services offered and sold regularlyContract awarded on “sole source basis” or on

basis of factors in addition to priceServices furnished at “market” or “catalog” prices

Page 35: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

“Commercial Services”Criteria (cont’d.)

Employee spends small portion of available hours on government contract

Employee receives same compensation plan

Contracting officer and prime contractor certify that criteria can be met and complied with

Page 36: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Concession Contracts Exemption

Section 4.133(b) of SCA provides a limited exemption for concession contracts principally (i.e., greater than 50 percent) for the furnishing of food, lodging, automobile fuel, souvenirs, newspaper stands and recreational equipment, but only if these services are principally furnished to the general public, who visit government recreation and scenic areas, as distinguished from concession services provided the U.S. Government or its personnel (e.g., cafeterias in federal office buildings).

Page 37: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

GOCO Contracts Exemption Contracts to operate or manage an entire federal

facility or program Sometimes contracts are entered into with a prime

contractor to operate a federal facility or program for and on behalf of the government.

Because the prime contractor is in effect operating in the place of the government as an “agent for the government, the prime contractor’s workers are not covered by the SCA. Subcontractors must comply with SCA.

Page 38: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Coverage Determinations

Contracting agencies have initial responsibility for determining whether SCA applies

DOL has authority for final determination on coverage

Final rulings may be appealed to the Administrative Review Board (ARB)

Page 39: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Introduction to SCA Wage Determinations

Page 40: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Basic Statutory Requirement

Sections 2(a)(1) and (2) of SCA provide that covered contracts in excess of $2,500 contain a wage determination

2(a)(1) – Wages

2(a)(2) – Fringe Benefits

Page 41: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Applying Wage Determinations(29 C.F.R. §§ 4.143 – 4.145)

Agencies must obtain new WD at least once every two years

New WD may be required each year if:

Contract subject to annual appropriations

Annual contract option being exercised

Most contract extensions, even if shorter than one year, require a new WD

Page 42: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Obtaining an SCA WD(29 C.F.R. § 4.4)

Regulations no longer require Agencies to submit Standard Form (SF-98) or an Electronic (e) 98

Agencies have option to download WD directly from website, or submitting an e98 to DOL, at http://www.dol.gov

Other approaches no longer utilized include the Blanket WD program, MOUs with agencies, and paper Standard Form (SF) 98 and 98a

Page 43: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Two Types of Wage Determinations

Prevailing – includes union dominance wage determinations

4(c) – based on the previous contractor’s collective bargaining agreement (CBA)

Page 44: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Prevailing Wage Determinations

Page 45: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Prevailing WDsPrinciples

WDs must be based on data

WDs must reflect a consistent wage and salary structure

Page 46: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Determining “Prevailing” Wage (29 C.F.R. § 4.51(b))

Majority paid same rate (rare) (e.g., union dominance)

If no majority, then measure of central tendency –

Median (midpoint in distribution)

Mean (weighted average)

Page 47: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Determining “Prevailing” Wage (29 C.F.R. §§ 4.51(c)-(d)) (cont’d.) Regulations also authorize “slotting” to determine rate

for occupation

Insufficient survey data

Based on similarity of duties and skills of occupations with sufficient data

Due Consideration

Page 48: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Basis for Prevailing WDs

The best available data – usually Bureau of Labor Statistics (BLS) surveys.

WDs may also be based on:

Non-appropriated Fund (NAF) surveys

Wage Board surveys and rates

GS locality pay schedules

Page 49: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

BLS Surveys

National Compensation Survey (NCS) - (This data is no longer available in a format that can be used to issue wage rates)

Occupational Employment Statistics (OES) survey

Page 50: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

OES

Surveys every metropolitan and non-metropolitan area in US

Mail survey conducted by State Employment Services under BLS’ direction

Samples 400,000 establishments annually for a three-year total of 1.2 million establishments

Page 51: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

OES (cont’d)

OES sample much larger than NCS and publishes results for more occupations

Does not level workers within an occupation

Data are used for ETA’s Foreign Labor Certification programs

Page 52: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

How is BLS Data Used for SCA WDs?

OES is the primary data source in which to issue wage rates.

Page 53: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Importance of Salary Structure for SCA

Surveys produce estimates with resulting anomalies in the data

Wage increases are capped at 10% annually

SCA wage rates are retained when the survey data below current SCA WD rate

Page 54: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Locality Basis of WDs

Locality has an elastic and variable meaning under SCA

WDs are based on data for a MSA and Non-MSAs

Regionwide

Nationwide WDs.

Page 55: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Consolidated (Standard) Prevailing SCA WDs

2005-2000 or 2005-3000 WD numbers

Wage rates for approximately 400 occupations grouped by several broad occupational categories

Based primarily on BLS cross-industry survey data

Job descriptions are listed in the SCA Directory of Occupation

Page 56: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Directory of Occupations

Contains standard position descriptions for most SCA occupations listed on prevailing WDs

Contains Federal Grade Equivalencies (FGE)

If WD occupation is not listed in the Directory, the position description may be included on the WD

Page 57: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Non-Standard Prevailing WDs

Usually based on different data sources

Data sources may be industry specific

May cover broader geographic areas

Job definitions may or may not be listed in SCA Directory of Occupations

Page 58: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Examples of Non-Standard WDs

Union Dominance Food & Lodging Halfway House Nursing Home Moving & Storage Fast Food Forestry

Forest Firefighting Elevator Maintenance Maritime Mail hauling Debt Collection Barber & Beautician Diving services

Page 59: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Fringe Benefits (on most prevailing SCA WDs)

Health & Welfare (H&W) Benefits:1996 Rulemaking -- Variance to permit nationwide

benefitsUpdated in June Based on:

BLS Employer Costs for Employee Compensation Use data for all workers in Private Industry

Page 60: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Fringe Benefits(cont’d.)

H&W rate is the total

Of all benefits not legally required,

Except vacation & holiday

H&W rate - two different methods of compliance

“Fixed cost” per employee

“Average cost”

(Discussed in Compliance Principles session)

Page 61: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Other Fringe Benefits (on most prevailing SCA WDs)

Vacation pay

Holiday pay

Page 62: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Clarifying Common Misconceptions About SCA WDs

Federal agencies must obtain SCA WD or request (by e98) for any contract in excess of $2,500

WHD issues SCA WD for any contract that may involve more than five service employees

For contracts with fewer than five service employees, WHD has the option of issuing a WD

Page 63: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Review and Reconsideration of SCA WDs

Must be timely submitted Prior to the Opening of Bids for an IFBNo later than 10 days before

Commencement of a negotiated contract Exercise of contract option, or Extension

Administrator within 30 days will render decision or notify that more time is needed

Page 64: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Review and Reconsideration of SCA WDs

Must provide supporting data:Current survey of contract location and contested

occupationBased on statistical sample of populationIdentification of who conducted survey and

statistical methods utilized Administrator ruling may be appealed to ARB

Page 65: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Administrative Review Board (ARB)

Independent review body to which any final ruling of the Administrator or decision of an ALJ may be appealed

Decision of the ARB is final administrative action

Title 29 C.F.R. Part 8 provides timeframes and procedures for ARB appeals

Page 66: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA - Section 4(c) Wage Determinations

Page 67: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Section 4(c) WDSIncumbent CBA

Part of 1972 Amendments to SCA, a Statutory requirement

Does not depend on issuance of WDShort-form WD should be issuedBased on incumbent CBAIncludes accrued, as well as prospective, wages and fringe benefits

A contractor may be its own successor

Page 68: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Application

The CBA must be applicable to work performed on the predecessor contract in order to have application to the successor contract

The successor contract must be for substantially the same services being provided in the same contract locations

Page 69: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Provisions

Successor contractor must pay CBA rates

whether or not employees are hired

whether or not signatory to CBA

Obligations of Section 4(c) are self-executing

Interpretation of CBA is based on intent of parties signatory to CBA

Page 70: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Limitations of Section 4(c) Section 4(c) does not extend to other CBA provisions

such as:

Seniority

Grievance procedures

Work rules

Overtime

Page 71: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Limitation on Self-Executing Application of 4(c)

Applies if contracting officer (CO) provides contractor and union with written notice of key procurement dates:IFB – CBA must be received by CO not less than

10 days before bid openingRFP – CBA must be received before award if start

is within 30 days, orRFP – Not less than10 days before start if award

is beyond 30 days

Page 72: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Exception to the Application of Section 4(c) Requirement

Successor contractor is statutorily obligated to pay the CBA rates until such time as the CBA is determined to be:“Substantially at variance” with locally prevailing

rates (29 C.F.R. § 4.10), orNot reached as a result of “arm’s-length”

negotiations (29 C.F.R. § 4.11)

Page 73: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

http://www.wdol.gov

(An E-Government Initiative)

Wage Determinations On-Line (WDOL)

Page 74: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

WDOL.GOV

Created by an inter-agency task force including DOL, DOD, OMB, GSA, DOE, and the National Technical Information Systems

The purpose was two-fold:

To meet the Presidential initiative for e-government

To enhance the public’s ability to obtain WDs

Page 75: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

WDOL.GOV

Provides access to:

SCA Wage Determinations (WDs)

Davis-Bacon Act (DBA) Wage Decisions

Archived SCA and DBA WDs

Page 76: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

WDOL.GOV

5th Edition of the Service Contract Directory of Occupations

e98

Agency Labor Advisors

DOL and FAR regulation cites

Users guide

AAMs

Page 77: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

WDOL.GOV

The system is menu driven

Reduces WD processing time

Ensures consistent application of labor standards

Provides an “alert” service to notify users of the latest update

Page 78: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Obtain SCA WDs onWDOL.gov

On WDOL homepage click on “Selecting SCA Wage Determinations”

Respond to each logic question

Two “Standard” prevailing WDs for each locality

Odd-Numbered WD

Even-Numbered WD

Page 79: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Obtain SCA WDs (cont’d.)

“Non-Standard” prevailing WDs

WDOL selection process will prompt user

Menu will provide a drop-down listing

20 specific service industries

If no WD available on WDOL, the CO must use the “e98” system

Page 80: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Monitoring SCA Wage Determinations

Effective WDs are:

WDs received timely by agency

Required to be included into contracts

Published in WDOL (date at top of WD) each Tuesday

Issued by DOL (date found next to WD#)

“Published” date and “Issued” date are different to reflect time needed to process

Page 81: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Alert Service

Contracting officer and the public may select to be notified of revisions to SCA WDs

Specific contract action

“Standard” WDs

“Non-Standard” WDs

E-mail notification for period of time or date

Page 82: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Archived SCA Wage Determinations

Current WDs are published and accessible

Prior revisions to WDS are maintained in the “Archived SCA WD” database

Archived WD Number must be known

May not be used without DOL approval

Page 83: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

SCA Regulations

29 C.F.R. § 4.6(b)(2)

SCA ConformanceProcedures

Page 84: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Conformance (Adding Missing Class of Work to WD)

Work not performed by a class on WD

Proposed rate must bear a reasonable relationship to those listed on WD:

No single formula

Look at comparable classes on WD

No specific analytical process to determine conformable rate

Page 85: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Conformance (cont’d.) Conformances may not be used to:

Artificially subdivide classes listed in WD

Combine two or more classes listed in WD to create a new class

Establish a job level lower than lowest level listed in WD for a job classification family (Computer Operator I through V)

Establish helper and trainee classes

Page 86: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Conformance (cont’d.) Contractor prepares conformance request (SF 1444)

or other format:

Proposes class of worker and job description

Proposes hourly rate and rationale

Submits to contracting agency no later than 30 days after employee performance

Request form (SF 1444) on WDOL.gov

Page 87: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Conformance (cont’d.)

Contracting agency reviews request

Makes recommendation

Submits to DOL for final action

DOL should respond within 30 days

Page 88: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Updating Conformed Rates(29 C.F.R. § 4.6(b)(iv)(B))

Two methods may be used: Submit a new conformance request, or “Indexing:”

Calculate overall percent change between rates in previous and new WD for classes used on contract

Overall percent change is applied to conformed rate to obtain an updated rate

Contracting agency must be advised, not DOL

Page 89: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

EXAMPLE OF INDEXING

WD Rev. 8 WD Rev. 9 %

Secretary I $10.00 $10.80 8

Accting Clk I $10.50 $10.71 2

10/2

= 5%

Previously conformed class:

Account Collector $12.50 + 5% =

New indexed rate is $13.13

Page 90: U.S. Department of Labor Wage and Hour Division 2011 McNamara – O’Hara Service Contract Act Webinar for Contracting Officials

U.S. Department of LaborEmployment Standards Administration

Questions?