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Deadlines Extended for Furnishing Forms 1095-B and 1095-C in Early 2017

November 21, 2016

The IRS has extended the due dates for furnishing 2016 Forms 1095-B and 1095-C to covered individuals and full-time employees, respectively, from January 31, 2017, to March 2, 2017.

In addition, the IRS is also extending good faith penalty relief to reporting entities who can show they made good faith efforts to comply with the calendar year 2016 information reporting requirements.

To read the entire IRS release, Click Here.

DOL Issues Paid Sick Leave Final Rule

November 3, 2016

The U.S. Department of Labor (DOL) issued its final rule that requires federal contractors to provide paid sick leave. The sick leave final rule implements Executive Order 13706, signed by President Obama back in Sept. 2015, to require contractors to provide up to 56 hours of paid sick leave annually to their employees beginning in 2017. A covered employee can earn one hour of paid sick leave for every 30 hours worked.

The final rule allows employees to use paid leave in cases of illness or injury of the employee or a family member; the need to obtain a diagnosis or receive medical care; or the need for leave results from domestic violence, sexual assault, or stalking.

The final rule will apply to all covered contracts solicited and awarded on or after Jan. 1, 2017. Federal contracts covered by final rule include:

  • Contracts for construction covered by the Davis-Bacon Act.
  • Service contracts covered by the Service Contract Act (SCA).
  • Concessions contracts even those exempt from the SCA.
  • Contracts involving federal property or lands in which services are provided to federal employees, their dependents, or the general public.


U.S. Department of Labor Announces No Change to SCA Fringe Rate

August 1, 2016

The prevailing health & welfare fringe benefits issued under the McNamara-O’Hara Service Contract Act (SCA) will remain $4.27.

Additional SCA Health & Welfare Benefit Rate Information

As mentioned above, all service contracts awarded on or after July 29th, 2016, will continue using the $4.27 SCA health & welfare benefit rate. However, Hawaii employers who provide health insurance under Hawaii law should use $1.78 per hour. The DOL memorandum is posted on the Wage and Hour Division (WHD) website.

For more information: Click Here to Read the Entire Memo

Fringe Benefit Group Selects Pentegra Trust Company as Trustee

August 1, 2016

Fringe Benefit Group, Inc., an industry leader in the design, implementation and administration of benefit plans for hourly workers, today announced that it has selected Pentegra Trust Company (“Pentegra Trust”) as the trustee for The Contractors Plan Master Trusts. As the discretionary trustee for The Contractors Plans, Pentegra Trust provides investment management services for the multiple employer trusts, including selection and monitoring of the investment funds made available to The Contractors Plan retirement plan participants.

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SBA Publishes Final Rule That Affects Construction Contracting

June 29, 2016

On May 31, 2016, the US Small Business Administration (SBA) published a final rule amending its regulations to make them easier to understand and use, as well as to increase the chances for small business prime contractors to partner with other businesses while maintaining their standing as an eligible small business. Since the federal government relies heavily on small businesses for construction, these changes should significantly impact construction contracting.

Prior to the final rule, the regulations were regarded as ambiguous or having numerous issues concerning application.  The SBA believes that the final rule provides clarity which should lead to more potential work for small businesses while not imposing any new costs.

 Some of the key areas addressed in the final rule include:

  • Changing the performance requirements applicable to small business and socioeconomic program set-aside contracts and small business subcontracting, and authorizing similarly situated subcontractors to count toward the performance requirements.
  • Allowing a joint venture to qualify as small for any government procurement as long as each partner to the joint venture qualifies individually as small under the size standard corresponding to the NAICS code assigned in the solicitation.
  • Amends SBA’s regulations pertaining to the nonmanufacturer rule and affiliation rules including the treatment of software as a commodity and the elimination of waiver requests for procurements within the Simplified Acquisition Threshold (SAT).

 SBA’s intent with the final rule was to benefit small business concerns by allowing them to use similarly situated subcontractors in the performance of a set-aside contract, thereby expanding the capacity of the small business prime contractor and potentially enabling the firm to compete for and obtain larger contracts. It also strengthens the small business subcontracting provisions, which may result in more subcontract awards to small business concerns.

 The federal government relies on small business for construction to a much greater extent on a percentage basis than it does across all federal procurement. Overall, the federal government spent $437 billion on goods and services in FY15. Of this amount just 22% was performed by small business.  During the same period the federal government spent $31 billion on construction, maintenance of facilities, and materials, 45% of the total was performed by small business.

 The SBA’s rule takes effect June 30, 2016.

Fringe Benefit Group Consolidates Entities

June 1, 2016

Fringe Benefit Group, Inc. an industry leader in the design, implementation and administration of benefit plans for hourly workers, today announced that it has consolidated several of its related companies into the Fringe Benefit Group, Inc. organization. Plan Benefit Services, Inc. and Employer Plan Services, Inc. (EPSI) have changed their legal names to Fringe Benefit Group, Inc.

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Construction Spending Strong in Public Sector

March 7, 2016

Recently the U.S. Census Bureau of the Department of Commerce announced the monthly estimates for construction spending in January 2016.

During that time, overall construction spending was estimated at a seasonally adjusted annual rate of $1,140.8 billion, 1.5 percent above the revised December 2015 estimate. The January 2016 figure is 10.4 percent above the January 2015 estimate of $1,033.3 billion. Though private nonresidential spending was up, the more significant jump, at least as a percentage, came from public construction spending.

Public construction spending had considerable growth over the past year, with overall spending up 13 percent from January 2015. Highway construction, along with commercial spending, is the primary driver of growth with increases of 34% and 56% respectively compared to the previous period a year ago.

From December 2015 to January 2016, public spending on construction was at $309.4 billion, 4.5 percent above the revised December estimate. A large driver of this growth came from highway construction which was $110.4 billion, 14.7 percent above the revised December estimate of $96.2 billion. Other strong sectors include conservation and development which was up 10.5 percent, and commercial which was also up 6.5 percent.

With regard to private spending, nonresidential was at $831.4 billion, just 0.5 percent above the revised December estimate of $827.3 billion. Residential construction was $433.2 billion in January, nearly the same as the revised December estimate of $433.1 billion. Nonresidential construction was $398.2 billion in January, just slightly above the revised December estimate.

The next data report for construction spending for February 2016 will be released April 1, 2016.

Executive Order Requires Sick Leave for Employees of Federal Contractors

March 2, 2016

The US Department of Labor Wage and Hour Division published a Notice of Proposed Rulemaking (NPRM) on February 25, 2016 to implement President Obama’s Executive Order (EO) requiring federal contract employees to earn one hour of paid sick leave for every 30 hours worked. Comments on the NPRM are due by March 28, 2016.

This new sick leave requirement will apply to new contracts, or replacements for expiring contracts, in which a solicitation was issued on or after January 1, 2017. Additionally, this requirement will apply to contracts awarded outside of the solicitation process on or after January 1, 2017. It is anticipated that this new benefit will result in 828,000 federal contractor employees having access to paid sick leave.

The sick leave requirement will apply to Federal contracts covered by the Davis-Bacon Act (DBA); Service Contract Act (SCA); concessions contracts, even those exempt under SCA; and contracts in connection to Federal property or land and related to offering services. The sick leave requirement specifically does not apply to contracts subject to the Davis-Bacon Related Acts because while those contracts are Federally-funded, they are not awarded by Federal agencies.

There are certain contracts that are specifically not covered such as grants, contracts and agreements with or grants to Indian Tribes; or construction contracts not subject to DBA or service contracts not subject to SCA. Additionally, the requirement does not apply to manufacturing or supply contracts covered by the Walsh-Healey Public Contracts Act.

However, when the sick leave requirement applies it applies to all employees whose wages are governed by the SCA, DBA, or FLSA – even those who qualify for an exemption from the FLSA minimum wage and overtime requirements.

Sick leave will accrue at the rate of one hour of paid sick leave for every 30 hours worked on or in connection with a covered contract. Contractors may limit the number of sick leave hours that can be accrued to 56 hours and these hours may be carried over from one year to the next. Contractors also have the option of making 56 hours of sick leave available at the beginning of the year instead of accruing it at the rate of one hour for every 30 hours worked. Contractors will not be required to pay employees the cash equivalent of any unused paid sick leave when the employee leaves its job.

The term “hours worked” is being used broadly to include all time an employee is or should be paid to include time working, or in paid time off status such as sick leave or any other paid time off provided by the contractor.

Sick leave can be used by the employee for their own illness or other health needs, to care for a family member who is ill or needs health care, or as a result of domestic violence, sexual assault or stalking.

If contractors already have a sick leave policy in place it can serve to satisfy this requirement as long as it provides the same benefits and rights as those required by the EO.

A final rule is expected no later than September 30, 2016. A copy of the NPRM can be viewed at


Enforcement Update from the DOL

January 14, 2016

This January the US Department of Labor (DOL) Wage and Hour Division (WHD) released statistics on aggregate enforcement data for their 2015 fiscal year, which ended September 30. This is part of an effort to make information more transparent, accountable, and responsive.

Here’s a summary of some of the enforcement trends reflected in the data.

  • In FY2015 the WHD collected $247 million in back wages, which is up 3%, or $6 million, from FY2014.
  • While fewer employees  received back wages in FY2015, the amount they were owed, $1,027 per employee in 2015, was more than in the prior year of $890.
  • Although there were fewer complaints than in any previously tracked year, it appeared to take longer to resolve them – 125 days, up from 116 days in 2014.

Within the construction industries, the number of cases with violations was down from the previous year. However, the number of those involving payment of back wages increased by almost 7%. In addition, there was a significant increase in the number of civil monetary penalties, which grew to 799,221 from 473,566 the prior year.

Overall, the data seems to suggest that WHD is spending more time on fewer and larger cases such as those with civil monetary penalties.

In 2016, the WHD has stated that they want to continue any momentum towards building a stronger and more effective enforcement program, growing staff and support efforts.


Subcontractors and the ACA: Preparing for 2016 (The Contractor’s Compass)

January 7, 2016

Recently K.C. Cannon, Regional Vice President,  wrote an article titled “Subcontractors and the ACA: Preparing for 2016”. It appeared in the December 2015 issue of The Contractor’s Compass (ASA’s monthly magazine).

Please check out the article by clicking here.