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Federal Market Intelligence for Small Business |
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Set-Aside Alert news analysis:Did DOL create an H&W mess?The Labor Dept. on Aug. 1 made a significant change in determining and implementing its annual changes in the Health & Welfare (H&W) benefit rates for federal contracts. DOL raised the rate for contracts covered under the Service Contract Act, as usual. But it also created a separate, reduced H&W benefit rate for contracts covered under President Obama’s executive order establishing up to 7 days of paid sick leave a year for federal contract workers. The DOL’s actions regarding the sick leave order are being called unproductive because they basically remove the benefits of the sick leave order and also cause increased administrative burdens, according to legal specialists. The sick leave H&W rate of $4.13 is lower than last year’s rate and will result in some employees losing the equivalent of $582 a year in benefits, according to Eric Crusius, senior counsel with Holland & Knight. “Contractors are faced with the difficulties in complying with the executive order even (though) no meaningful benefit is given to workers any more,” Crusius wrote. “Only Rube Goldberg could be proud of this series of events.” The lower sick leave rate is intended to partially offset the costs of the paid sick leave. But it also causes administrative issues. “DOL’s use of two rates will create administrative complications for contractors whose workforce is working on both covered and non-covered contracts,” wrote Richard B. Oliver and Glenn Sweatt, attorneys with Pillsbury Winthrop, in a recent column. Meanwhile, the DOL raised the rate for new contracts covered by the Service Contract Act. Effective Aug. 1, that rate rose to $4.41 per hour, up from $4.27.
More Information:
Crusius column: http://goo.gl/iJG4mM
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