On June 30, 2015, the U.S. Department of Labor (DOL) increased the McNamara-O’Hara Service Contract Act (SCA) Health & Welfare benefits from $4.02 to $4.27. A notice is not sent directly to contractors and unfortunately for them the importance of this change lies with timing. For those contractors that are currently working diligently on preparing cost proposals, this increase will directly affect you. According to the DOL memorandum that put this change into effect, “all invitation for bids opened, or other service contracts awarded on or after June 30, 2015, must include an updated SCA WD issued in accordance with the regulatory health and welfare (H&W) fringe benefit determination methodology.” So if you have recently submitted a proposal subject to the SCA, we suggest that you ensure that your H&W meets the SCA H&W requirement of $4.27.

Of passing interest, President Obama on September 7, 2015, issued Executive Order (EO) 13706, “Establishing Paid Sick Leave for Federal Contractors”.   The EO requires the DOL to issue a regulation by September 30, 2016 which means there will likely be a proposed rule, public comments, and a final or interim rule effective in contracts executed October 1, 2016 (or later). As currently stated, it appears that the new requirement for paid sick leave will be in addition to the H&W requirements within the Service Contract Act; however, that will need to be vetted and clarified as the EO transitions into a contractual regulation.

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Written by Charles Hamm, Esq.

Charles Hamm, Esq. Background Charlie is a Managing Consultant with Redstone Government Consulting, Inc., located in our firm’s Huntsville, Alabama office. His areas of expertise include working with government contracting issues, risk assessments, unallowable costs, policies, procedures and current regulations. His legal background and his continuous involvement with our high level DCAA experts and legal experts provides him an ability to assist our customers in interpreting and understanding the regulations beyond what would normally be expected from a staff Senior Consultant. His background in finance coupled with his law degree is a benefit to our customers and our team. Professional Experience Mr. Hamm’s experience includes analyzing government contracts and providing support to government contractors. In addition, Charlie has experience assisting clients with Federal Acquisitions Regulations (FAR) best practices and compliance. His legal background allows him to have a diverse viewpoint of the aspects associated with government contracting. Prior to joining Redstone Government Consulting, Inc., he worked with law offices in various areas of the law. His role with the Mississippi Center for Justice in Jackson, MS included working with foreclosures as well as assisting his clients apply for government exemptions. His work with a family law firm (JSA Law in Memphis, TN) consisted of evaluating asset distribution through relevant case law. Education Charlie graduated with a BSBA in Finance with a Concentration in Investment Management from the University of Alabama in 2009. Charlie also received his Juris Doctorate from Mississippi College School of Law in 2013 and was admitted to the Alabama State Bar in 2014.

About Redstone GCI

Redstone Government Consultants are a team of the most senior industry veterans and the brightest new talent in the industry. Many have held senior government positions including leadership roles in the DCAA. Our new talents bring significant accounting and software experience along with fresh perspectives, inspiration and energy to our team. Through our leadership and combined experience, we provide a unique perspective, bringing both government and contractor proficiencies to bear and ensuring rock-solid government compliance for our clients.

Topics: Contractor Employee Compensation, Contracts Administration, Defense Contractors