Part 5 of 6
Key Details: Navigating the compliance maze in the government contracting industry can be a daunting task. Understanding the fundamental compliance requirements is essential for any government contractor looking to succeed in this highly regulated industry.
In this 6-part series, we break down some of the most critical compliance areas that every government contractor should be aware of. This article series covers the following topics:
- General compliance considerations
- Accounting system compliance
- DCAA and SF 1408 compliance
- Payroll and timekeeping compliance
- Labor law compliance
- Other compliance considerations
Every government contractor’s compliance requirement may vary significantly depending on their company size, the nature of contracts, and the specific government agencies they work with. As such, it is critical to consult with a trusted advisor to understand the requirements specific to your company. Note that the items included in this article are not wholly exhaustive but are intended to be used as a guide as you build your compliance program.
At Ryan & Wetmore, we work closely with contractors to ensure they meet relevant requirements and avoid potential pitfalls. To assist in this process, we offer a detailed compliance questionnaire designed to help you assess your unique compliance needs. Speak with a Ryan & Wetmore advisor today to learn more.
Labor Law Compliance Considerations
Ryan & Wetmore’s labor law section of the compliance questionnaire encompasses a wide range of responsibilities and requirements that contractors must manage to ensure they meet federal regulations and contractual obligations. The following list is not exhaustive; contact Ryan & Wetmore for a more exhaustive list.
- Regularly review and update policies and procedures to ensure compliance with relevant federal and state labor laws, including those relating to wages, benefits, working conditions, and workplace safety.
- Assess whether any employees are exempt due to the Fair Labor Standards Act (FLSA) (e.g., executive, administrative, professional exemptions) and ensure that non-exempt employees receive appropriate overtime pay. Maintain accurate records of hours worked to comply with wage and hour regulations.
- Implement policies that prevent discrimination based on race, color, national origin, sex, and religion. Conduct regular training to prevent harassment and promote diversity and inclusion in the workplace.
- Review workplace accommodations to ensure they meet the requirements for employees with disabilities. Implement policies to prevent discrimination and ensure accessibility for all employees.
- Ensure that employees are aware of their rights to take unpaid leave for serious health conditions, caregiving responsibilities, or family emergencies under the Family and Medical Leave Act (FMLA). Maintain proper documentation and follow guidelines for leave requests.
- Ensure that affirmative action programs are in place to promote equal employment opportunities if required. Regularly audit hiring and promotion practices to prevent discrimination. Also ensure that policies support the hiring and employment of protected veterans and that veterans are given equal opportunity for employment, training, and advancement.
- If your company is providing services under a qualifying federal contract, ensure compliance with the Service Contract Act (SCA), which requires that service employees be paid prevailing wages and benefits as determined by the U.S. Department of Labor. Similarly, if your company is involved in construction work on federally funded or assisted projects, ensure compliance with the Davis-Bacon and Related Acts (DBRA), which mandate that laborers and mechanics are paid prevailing wages and fringe benefits for their specific job classification. Maintain proper documentation to demonstrate adherence to both wage determination and recordkeeping requirements under these programs.
- Ensure your company is registered with the Office of Federal Contract Compliance Programs (OFCCP) to track compliance with federal contracting requirements, including affirmative action and anti-discrimination rules if covered.
- Determine if your company is required to submit an annual Equal Employment Opportunity Component 1 Report (EEO-1) or Veterans’ Employment and Training Service Annual Report (VETS-4212). Ensure timely and accurate filing of EEO-1 reports (which provide demographic data on employees) and VETS-4212 reports (which track veterans’ employment). Non-compliance can result in penalties.
- Develop a robust compliance training program for HR personnel, managers, and staff. Conduct regular internal audits to ensure compliance with all applicable labor laws.
- Consult with legal counsel to stay updated on any changes to regulations.
Conclusion and Action Plan
Navigating the complexities of government contracting requires a rigorous and proactive approach. From adhering to FAR requirements and ensuring proper accounting practices to maintaining ethical standards and labor law compliance, government contractors must remain vigilant in meeting all federal requirements.
To learn more about your compliance requirements or to discuss our compliance questionnaire, contact Ryan & Wetmore today.
Today’s Thought Leaders
About Peter Ryan
Partner, Co-founder, & CPA
Peter T. Ryan co-founded Ryan & Wetmore in 1988 with business partner Michael J. Wetmore. Peter provides clients with the best strategies for success. His expertise extends across various industries. Peter obtained a Master of Business Administration in Finance from the University of Baltimore and a Bachelor of Arts in Accounting from the Catholic University of America.
About Rosie Cheng
Finance Consultant
Rosie Cheng is a Finance Consultant at Ryan & Wetmore. She focuses on government contracting services and produces many of the firm’s government contracting newsletters. Rosie graduated from Georgetown University with a Master of Science in Management and from William and Mary with a Bachelor of Business Administration.
