Rice Business Report May 2019 Rice Business Report | Page 7

7
Is Your Company SCA Compliant? Figure It Out Before the United
States Department of Labor Figures It Out for You
Continued from page 6……..
Contractors also may face similar challenges when utilizing personnel at contractor facilities that perform
both SCA covered services for government customers as well as non-SCA covered services for commercial
customers during the same work day or even within the same pay period. Unless the contractor elects to
pay its SCA covered personnel at the SCA rates for all hours worked (even though the employee is not
working all hours under an SCA contract), contractors need to have a way to segregate the SCA hours
from the non-SCA hours. Without such segregation, there is a significant risk that DOL would direct the
contractor to pay all hours worked by such an employee (whether for government customers or commer-
cial customers) at the relevant SCA wage rate.
Contractors faced with these circumstances should consider one of two options. They should evaluate
whether to modify their performance to segregate the SCA covered workers' hours as needed, or (b) pay
SCA covered workers at the applicable SCA rate (or higher SCA rate, if choosing between two) for all hours
worked in any week when the workers perform SCA covered work. Contractors should choose whichever
option is more cost effective and more likely to ensure that the SCA employees receive no less than the
prevailing wages as required by the SCA regulations.
Wage Determinations and Place of Performance
The SCA and implementing regulations contain detailed guidance on WD incorporation procedures and
related topics such as place of performance. Simply put, however, contractors often overlook ensuring
that the correct and current WDs are incorporated into the Contract (although DOL auditors and investi-
gators tend to focus on that issue), and correcting the issue after its discovery can be a challenge. Under
the SCA, contracting officers must request a WD prior to any of the following: (i) invitation for bids; (ii)
request for proposals; (iii) commencement of negotiations; (iv) exercise of option or contract extension;
(v) annual anniversary date of a multi-year contract subject to annual fiscal appropriations of the Con-
gress; or (vi) biennial anniversary date of a multi-year contract not subject to such annual appropriations,
if so authorized by the Wage and Hour Division. Revised WDs are to be incorporated into applicable fed-
eral contracts, which is typically done at an option year renewal; however, a contracting agency may elect
to incorporate a revised WD prior to contract anniversary.
Continued on page 47……..
Rice Business Report