- If you looked at all the day-to-day aspects of your compliance management, would you feel confident saying, "I'd be okay if the Department of Labor (DOL) audited my business"? Would you bet the financial health of your business on it?
Compliance management is complex
- What makes compliance tricky is that so many groups are involved. Reporting job classifications and hours to payroll so they can pay the correct wages. Then you must provide proof that it was done. Similar to how your HR must prove a benefit is part of a "bona fide" employee benefit plan.
- Making sure all the necessary tasks were done (and correctly) is where we see a lot of compliance systems fail. Not because a person isn't competent. Compliance is... complicated.
Who is managing your compliance?
- Typically your compliance management should be handled by someone both detail-oriented and accountable. The problem, more often than not, is that they're assigned too many important tasks. That's why over 75% of contractors were found in noncompliance in 2014.
- One minor oversight in your compliance can become a big problem if the DOL comes knocking.
Increased DOL enforcement
- With the DOL increasing its enforcement efforts, every contractor should be evaluating their compliance management to avoid potentially disastrous consequences.
- You might be thinking, "well, the DOL only goes after the big guys and I'm just a small contractor." That's not always the case as Tempe Mechanical found out earlier this year.
Labor law violations can cripple government contractors
- This mid-sized Arizona-based government contractor was found at fault by the DOL to the tune of more than $130,000+. On top of the back wages and overtime pay, Tempe Mechanical was debarred (3 years) from all government contracts. Contrary to what many contractors might believe, "size doesn't matter" in the eyes of the DOL.
- What does an audit-proof compliance management system look like?
How do you track compliance?
- At Axim FSG, we guarantee our contractor's compliance 100%. So much so that we'll pay any fine incurred by a DOL audit. How can we be so sure?
- We have a compliance tracking model that works (and we don't mind sharing).
- Assess where your compliance is currently at. A mini-audit. This will shed light on any weaknesses you have with your system. Once you know what they are, you can eliminate those compliance gaps by properly training your employees.
- Perform periodic reviews with payroll to verify employees are correctly classified for the jobs they are performing. You'll also want to perform an overall audit couple times per year to ensure you remain in compliance.
- If mistakes are found, make corrections and inform the government (in a timely manner) that you did so. Making a mistake isn't wrong, but not fixing it is.
- The ultimate mark of compliance is whether or not you can cooperate easily with the DOL upon an audit. Please feel free to use our compliance tracking model as a basis for comparison for your own compliance management.
Don't gamble with your compliance
- With only one in four contractors having a compliance system that worked last year, you don't want to gamble the future of your business on it.
- 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