- If you look at a list of base rates for a contract, it seems simple enough. You classify a worker by their labor category/skill level, and then pay them the appropriate wage. But if you have been in government contracting before, very few thing are that simple- including base wages.
- There are a number of tricky factors that go into figuring out the base wage. Contractors need to pay particular attention to base wages as the DOL focuses heavily on it during an audit / investigation.
Correct & Current Wage Determinations
- Despite the fact they consider base wages to be so important, the DOL doesn’t make it easy.
- So what makes determining base wages hard? Who the employee is and their trade certification or license, the type of equipment they are using, and where the work is literally being done are all factors. Ones that can make for some really complex situations…
Base Wages Can Be Complicated
- Think about a truck driver that used two different trucks in three states during the same day. How much are you supposed to pay that truck driver at each interval? What if he didn't record his hours and he's just one of five similar employees.
- Crazy as it sounds, where the work is performed can get even more complicated than just crossing a state boundary.
Place of Performance Changes
- Base wages are calculated on the idea that the worker lives in the area he or she works. So changing locations can complicate things. In some situations, there are even "invisible borders" within cities that affect wage rates on top of county / state lines.
- It can even get more complicated…
- If your company adds a new office, warehouse or an employee starts working from home... that changes their location and thus their base wage could change as well. And all of these things can be considered DOL violations.
- The only way to prevent base wage errors is to constantly monitor and audit your own records. Or as good contractors often do, subcontract that work to someone who will do it better and for less money.
- With a state of the art compliance tracking system, Axim Fringe Solutions Group can ensure that your base wages are correct in the face of a DOL audit. We can also lessen the burden of compliance tracking from your office staff while lowering overhead costs.
- Three Common Service Contract Act Compliance (SCA) Stumbling Blocks
- How Cash-in-lieu Opt-Outs Increase Costs for Federal Contractors
- The Government Contractor’s Guide to Service Contract Act (SCA) Compliance
- How “No Change” to the SCA Health & Welfare Benefit Rate Impacts Government Contractors
- SCA Compliance Checklist Part 8: Fringe Benefits
- SCA Compliance Checklist Part 7: ACA Compliance
- SCA Compliance Checklist Part 6: Subcontractor Compliance
- SCA Compliance Checklist Part 5: Fringe Rate
- SCA Compliance Checklist Part 4: Base Wages
- SCA Compliance Checklist Part 3: Labor Categories