Axim Overview

Service Contract Act Compliance Checklist - Labor Categories

  • Labor Categories seem like a simple enough idea. The contract defines all the different tasks to be performed on that job. (i.e) how much to pay a person per hour for completing a set task.
  • But, ask anyone who does contract payroll and they'll tell you, it's not that straightforward.
Service Contract Act Compliance - average wage
Understanding Labor Categories
  • Employees can sometimes work three or four different job classifications in a given day. Sometimes the type of labor performed isn't even listed, leaving them to guess the appropriate rate / labor category.
  • If labor categories were simple, then a company like Lockheed Martin that specializes in government contracting would get it correct? However, a company with their level of expertise and resources can still make costly labor category mistakes.
Service Contract Act Compliance - Lack of required job qualifications
Lack of 'Required Job Qualifications' Can Be Costly
  • One method the Department of Labor (DOL) uses to make incorrect labor categories sting is what we like to call the "Lost Toll Ticket" system. If you've ever been on a toll road / turnpike and lost your ticket, you know what happens. You get charged the highest fare because you can't prove anything different.
Service Contract Act Compliance hours worked
Multiple Labor Categories
  • The DOL takes the exact same approach on labor category violations. If you can't prove by their standards what hours your employee worked at what rate, you owe at the highest rate for all of it (including overtime). This could end up costing you a lot of money.
Service Contract Act Compliance - violations
Job Misclassifications = Potential Violations
  • Another place the DOL can make compliance violations hurt is during the bidding process (future contracts). Compliance violations follow you around for years and it's become a significant factor in determining contract award status. Essentially, a few misclassifications can give your entire government contracting efforts a gloomy outlook.
  • At Axim Fringe Solutions Group, we've found government contractors take one of three approaches to combat labor category issues.
Service Contract Act Compliance - Managing Labor Categories
What Can You Do?
  • The first method (no cross-classification) will keep you relatively safe, but it's also a more costly approach. The second and most popular method adds more burden to internal staff and there's no guarantee it's done correctly.
  • A third and relatively new option that's growing in popularity is subcontracting compliance management as part of the fringe spend.
Service Contract Act Compliance - Axim - A Strategic Partner
  • Not only do we save you time and money, but we also guarantee your compliance. As a "zero cost" contractor Axim will remove the burden of labor categories and SCA compliance from your internal staff.
  • To learn more about how Axim FSG can help with labor categories or SCA compliance, please contact us. Follow Axim Fringe Solutions Group on Twitter & LinkedIn.

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