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Department of Labor Increases the SCA Health & Welfare Rate and Establishes Two Other Rates

On July 25, 2017, the Wage and Hour Division of the U.S. Department of Labor updated and increased the McNamara-O’Hara Service Contract Act (“SCA”) Health and Welfare (“H&W”) Fringe Benefit to $4.41 per hour (i.e., $176.40 per week or $764.40 per month). The increase will be effective as of August 1, 2017. This is an increase of 14 cents per hour, up from 2015-2016 rate of $4.27. The new update also included a rate for those employees who fall under Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors. A new reduced rate of $4.13 per hour (i.e., $165.20. Read More.

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The Potential Market Shifts of Buy American and Hire American

On April 18, 2017, President Trump issued Executive Order 13788, “Buy American and Hire American.” Executive Order 13788 aims to “create higher wages and employment rates for workers in the United States, and to protect their economic interests” by decreasing American reliance on foreign workers and products. While the “Buy American” and “Hire American” aspects of the executive order have a common underlying theme, each facet will have significant impacts on policy changes independent of each other. In accordance with the executive order, heads of all agencies have until September 15, 2017, to: Assess the monitoring, enforcement, and implementation of,. Read More.

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Fair Pay and Safe Workplaces Nullified

On March 6, the Senate passed Joint Resolution 37, repealing President Obama’s Fair Pay and Safe Workplaces (“FPSW”) executive order, Executive Order 13653. Subsequently on March 27, President Trump issued an executive order revoking Executive Order 13673, section 3 of Executive Order 13683 of December 11, 2014, and Executive Order 13738 of August 23, 2016. The FPSW executive order was issued on July 31, 2014. Originally planned to take effect on October 25, 2016, the executive order required contractors and subcontractors to report certain labor law violations, to provide certain information to employees with their paychecks, and prohibited involuntary arbitration. Read More.

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Executive Order Ends Enforcement of Johnson Amendment

President Trump has signed an Executive Order directing the Internal Revenue Service not to enforce the Johnson Amendment. Announced last week, the Executive Order ensures that tax-exempt organizations will not be penalized for engaging in certain political activities. The Johnson Amendment was introduced in 1954 to discourage tax-exempt organizations from participating in political activity.

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New Labor Compliance Requirements Coming Soon

In July 2014, President Obama signed Executive Order 13673, Fair Pay and Safe Workplaces, which is scheduled to go into effect sometime this spring. The goal of the order is to ensure that government contractors who do business with the Federal government comply with required labor laws and promote safe, healthy, fair and effective workplaces. Prior to the award of a contract for goods and services, including construction where the estimated value will exceed $500,000, an offeror will be required to certify that it is in compliance with a variety of labor laws. Such laws include the Fair Labor Standards. Read More.

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Department of Labor Proposes Rule Implementing Paid Sick Leave

On September 7, 2015, President Obama signed Executive Order (“EO”) 13706, establishing paid sick leave for federal contractors. The EO requires federal contractors to establish a policy to provide at least seven paid sick days annually, including paid leave allowing for family care. The Secretary of Labor was given until September 30, 2016, to issue regulations on the EO, which goes into effect January 1, 2017. On February 26, 2016, the Department of Labor (“DOL”) published its Notice of Proposed Rulemaking (NPRM) implementing EO 13706. The DOL predicts that the proposed rule will have a significant impact on federal contractors. Read More.

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