DOL Finalizes Executive Order # 13495

Executive order # 13495 pertaining to “ Nondisplacement of Qualified Workers” was finalized on January 18, 2013. The ruling ensures qualified workers on a Federal Service Contract who would otherwise lose their jobs as a result of the completion or expiration of a contract will be given the right of first refusal for employment, with the successor contractor. Generally, a successor contractor may not hire any new employees under the contract until the right of first refusal has been provided. This order applies to a successor for the performance of the same or similar services at the same location.

This order defines service contracts or contract to mean any contract or subcontract for services entered into by the Federal Government or its contractors that is covered by the McNamara-O’Hara Service contract Act.

You can review FAR 52.222-17 for more comprehensive details about this new executive order. Also, look at Fact Sheet # 67A: Nondisplacement of Qualified Workers on www.dol.gov that provides a more detailed explanation about the order and whom to contact if you have more questions.

DOL Audit Statistics for FY 2012

In Fiscal Year 2012, the Wage and Hour Division (WHD) in Washington DC collected more than $32 million dollars in back wages for underpaid Davis Bacon workers as the result of more than 50 project investigations. The Branch’s work exceeded the overall strategic plans call for an increase in enforcement of the Service Contract Act.

The coordination of this goal resulted in resolving 858 SCA cases and collecting $44,888,935 in back wages for approximately 15.6 million service employees. Of the 858 cases, 634 were found in violation under SCA. In addition there were 19 SCA debarments processed in FY 2012.

Having knowledgeable personnel capable of handling a DOL audit can protect you from wage settlements and possible debarment. For more information contact MARAL, LLC (acorvigno@marallc.com) and set up a one-day SCA/DBA training seminar for your employees.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe-benefit obligations and provides your employees with valuable benefits.

Presented by John B. Steiger

As a New Year begins, many people make resolutions to better themselves and their lives—lose weight, volunteer, spend more time with the kids or grandkids . . . nearly everyone has something they hope to change. Why not add one more important item to your list this year?

Throughout the last few months, the media has focused on the fiscal cliff—those sweeping tax increases and spending cuts that are due to go into effect on January 1, 2013, unless Congress acts to change them. But that discussion shouldn’t overshadow positive developments in the U.S., nor should it stop you from making improvements to your financial health in 2013.

Consumer Markets Look Good

Consumer sentiment is as high as it has been since 2007; this can be attributed to three main areas: unemployment, consumer debt, and housing.

At 7.7 percent, as of November 2012, the unemployment rate is well below its peak, and analysts expect slow but steady increases in employment in 2013. Estimates from the National Association for Business Economics suggest that, at this time next year, the economy will be adding an average of 173,000 new jobs per month; the current average is 151,000.

A second bright spot is consumer debt. Low borrowing rates have helped consumers reduce their obligations significantly, bringing debt to its lowest level since the start of the recession.

For most people, their home is their biggest asset, so positive developments in the real estate market are especially promising. Demand for houses has risen, resulting in increased prices and leading both sellers and buyers to take action. Demand should stay high if the Federal Reserve continues its bond-buying program, which will keep mortgage rates low.

Uncertainty Abroad

Although there are signs of optimism on the home front, there are many international concerns that could spill over into our economy in 2013:

• If the euro continues to rebound, it could signal a potential end to the European debt crisis.
• It remains to be seen, however, whether or not Spain will be too proud to accept the European Central Bank’s offer to buy its bonds.
• Elections taking place in Germany and Italy in 2013 are expected to have a significant impact on the future of the eurozone as well.
• A current feud between China and Japan over ownership of several islands in the South China Sea could restrain growth in this booming region.
• The euro is not the only currency to face struggles—the yen is very weak as well.

Your Personal Financial Health

These, of course, are all macroeconomic issues that are beyond our control, and we often have to accept a degree of uncertainty and unpredictability when it comes to the financial outlook both at home and abroad. That doesn’t mean that you should leave your personal financial future to chance, however. You can always make positive adjustments to help ensure that you are better prepared for whatever the future might bring. Here are some simple suggestions:

Pay down debt. Although it’s normal to have some debt, too much can quickly become overwhelming—and debt often piles up after the holiday shopping season. Make a plan to pay off debt starting with credit cards that have the highest interest rates, and, whenever possible, pay more than the monthly minimum to pay off debt more quickly.

Increase your savings. As you pay off your debt, keep an eye to your savings as well. No matter what your goal is—maybe a vacation or an emergency fund—create a timeline and action strategy to help you get there.

Develop a budget. A budget is an extremely valuable tool for people of all income levels. Outline your monthly and yearly expenditures so you can see exactly where your money goes, as well as how much discretionary income you have left to work with.

Review your credit report. Everyone is entitled to one free report a year from each of the three major credit reporting agencies—Equifax, TransUnion, and Experian. Use a website such as annualcreditreport.com to request your reports and find out where you stand. Be sure to check for any errors or suspicious activity.

Start a college fund. Many students are now paying more than $60,000 per year for college, and this number is continuing to rise. There are many options for creating an effective college savings plan, and it is never too soon to start discussing them with your financial advisor.

Assess life changes. Even the smallest life changes can affect your financial situation. As each year passes, it is a good idea to review your insurance coverage, retirement plan, will, and estate plan to ensure that they continue to meet your needs.

Protect your identity. With the wonders of technology comes the risk of identity theft. Be sure to review monthly statements for suspicious activity, avoid using your social security number—and don’t carry your card with you—make online purchases only on secure websites (which have addresses that begin with https), and don’t open e-mails from unknown senders.

Further your financial knowledge. Your financial advisor is here to help you through any financial obstacles, but it never hurts to learn something new. There are countless websites, TV shows, and books that can help you further your knowledge.

No matter what 2013 brings, your financial advisor can help navigate your way to your goals. Please do not hesitate to contact our office with any questions you may have. Most important, best wishes for a happy and healthy New Year!

John B. Steiger is a financial consultant located at Wealth Planning Resources 460 Totten Pond Road Suite 600 Waltham, MA 02451. John offers securities as a Registered Representative of Commonwealth Financial Network®, Member FINRA/SIPC. John can be reached at 781.547.5621 or at john@financialconnector.com.

© 2012 Commonwealth Financial Network®

At Cleary, we are committed to a holistic approach of protecting and preserving our clients’ financial assets. Give us a call today at 617-723-0700 and let us know how we can help you.

At the December 2012 Professional Services Council Labor Relations Committee (PSCLRC) meeting, US Department of Labor (DOL) Wage and Hour Division representatives indicated that the Federal Acquisition Regulation Proposed Rule entitled Nondisplacement of Qualified Workers Under Service Contracts should become finalized early next year, possibly in January 2013.

DOL stated that they will have a webinar and separate e-mail for questions regarding this rule.

Contractors must still ensure that their respective contracting officers put this stipulation into their contracts before implementation.

DOL Investigations

At the December PSCLRC meeting, DOL Wage and Hour representatives revealed that there were more than 800 service contract investigations during the last fiscal period; $44 million collected in back pay wages from contractors; 15,000 employees investigated; and 19 debarments. The representatives were asked for additional quantitative breakdowns on this data, but they said the information was confidential. As a result of this response, another meeting with the DOL administrator is scheduled for January 2013 to continue the discussion.

All the contractors present at the meeting provided input to the DOL indicating that they have received numerous complaints from member companies as well as contracting agencies regarding the methodology of these investigations, some of which went on for as long as 18 months without reaching a conclusion.

The DOL confirmed that the 300-plus full-time investigators hired in the past three to four years under ARRA funding will remain. These investigators have been trained in stages, according to the when they audit contractors they have to check 10 to 12 statutes, which takes a considerable amount of time. There can also be delays if they request information from the contracting community and do not receive it in a timely fashion.

The DOL representatives stated that many of these investigations have been “directive” rather that responding to individual complaints. They also mentioned that if an investigator is directed to check out a complaint under Executive Order #13495, they may also conduct a complete investigation of the prime contractor and all of its subcontractors.

PSC members stated that some of the investigators have harassed contractors, alleging that if they did not pay what was stated in the summary of unpaid wages, the DOL would withhold funds on the contract or have them face debarment. Contractors also indicated that investigators were asking for too much company data and for too many records, and in many cases asked for the same data twice. There have also been many instances where investigators did not have a firm foundation in the Service Contract Act, leading to further delays in getting the audits completed. Some of these investigations are taking too long, the contractors said, and as a result, if there are findings that a contractor is liable and must pay back wages, the amount of back pay is more than it would have been had the audit been completed earlier.

PSC again reiterated to DOL that if an investigator finds that a contractor is not in violation, but the contracting entity has violated the rules and back pay is deemed necessary, it is the contractor who appears on the violation. PSC members feel this is unfair and must be corrected.

It was recommended that every contractor ensure that all their personnel dealing with Service Contract Act issues or responsibilities have adequate training. For more information, contact MARAL,LLC; or Al Corvigno, who provides a one-day SCA/DBA course, at 252-312-4853 or acorvigno@marallc.com.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe-benefit obligations and provides your employees with valuable benefits.

If you are a contractor who also plows snow for public or private entities, there are a few things you should know before you start plowing this winter.

Your automobile insurance policy will provide you with liability coverage — bodily injury and damage to the property of others — while you are actually plowing. And hopefully (keep reading), your general liability policy covers you once you have finished the work. That is, it provides coverage for suits regarding slips and falls resulting from any alleged poor plowing claims that might come.

Massachusetts courts used to have a high bar for proof of negligence before these types of slip-and-fall claims could proceed. “As a pedestrian in New England, you should know it snows and the ground is slippery, plowed or not!” Recently the bar has been lowered, however, allowing these types of claims to proceed at a lower threshold of negligence. Not good for the snow plow operator.

Plowing for a private entity is riskier than plowing for a governmental entity because it is harder to sue a public entity and those working for them. However, the shopping mall operator and his contractors are fair game.

Don’t assume your general liability policy covers you for these slip-and-fall claims. Many contractors’ general liability policies exclude, by endorsement, snow-plowing operations. In this case, you would need to purchase this coverage separately. Always check with your broker to see if you are covered!

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.

Superstorm Sandy was a catastrophic event by any measure. The damage inflicted on New York City and the surrounding coastal communities was unprecedented. Insured losses are estimated to total between $20 billion and $25 billion. The impact of the storm was tragic but also serves as a reminder for both insurance coverage issues and emergency preparedness.

Flooding was a significant source of damage from Sandy. Unfortunately, it is estimated that 70 percent of individuals and businesses located within the flood zones did not carry flood coverage. Loss due to flooding is not automatically covered under commercial property insurance, but most policies have the ability to add flood as a covered peril. For properties located in or adjacent to a flood zone, coverage is available through the National Flood Insurance Program (NFIP) through a separate policy. The following link provides additional information on the NFIP and includes a Flood Risk Profile you can use to assess your location: http://www.floodsmart.gov/floodsmart/.

Business Interruption claims comprise much of the insurance loss sustained due to Sandy. A 13-foot storm surge struck lower Manhattan, causing widespread damage to infrastructure and office buildings. Many firms were unable to access their office locations and some continue to be displaced months later.

Business Interruption coverage indemnifies the policyholder for the loss of earnings resulting from a covered property loss. Business Interruption insurance should provide coverage for lost profit and continuing expenses a business incurs due to the temporary closure of the business as a result of the event. Flood needs to be a covered peril in order for your insurance to respond to a business interruption directly caused by a storm surge. Extra Expense is commonly included with Business Interruption coverage and would respond to reasonable additional costs a business incurs to keep operating. An example of an extra expense would be the additional cost to rent a temporary office in order to continue operations.

Property policies will typically include a number of additional coverages that could also respond to an event such as Sandy. These coverages generally have specific limits assigned to them, but you often have the flexibility to increase the coverage.

Civil Authority coverage applies when a location’s access is restricted due to an evacuation order from the government. This coverage can apply if your location is within the restricted area even if you do not sustain a direct physical loss. The coverage will frequently have a specific time period or limit that will apply.

Utility Services coverage can provide for direct damage or business interruption due to loss of electrical, water, or communications services. There are limitations based on how and where the utility services are interrupted. Coverage almost always has a specific limit assigned to it and may include restrictions such as excluding loss due to “overhead transmission lines.”

Property Insurance may include coverage for Ingress or Egress. After Sandy, many workers were unable to return to their offices due to damage to surrounding streets as well as reduction of access to commuting options. Ingress/Egress can provide some coverage for this type of exposure but may include limitations on location and source of the restriction. The restriction would have to be triggered by a covered peril.

Dependent Business Interruption can provide coverage due to a loss suffered by a key customer or supplier. The loss needs to be triggered by a covered peril, and the coverage will have a specific limit. Businesses that rely on a key supplier or customer should evaluate this coverage carefully.

Disaster planning is an important component of a risk-management plan for any business. Many businesses are able to continue operations by working remotely, but it takes advance planning and attention to infrastructure in order to be successful. There are many sources to assist you with developing a disaster plan for your business. FEMA’s link for businesses is http://www.ready.gov/business. Many insurance carriers can also provide guidance and tools to assist with the process.

Superstorm Sandy proved that a large storm can have far-ranging impact beyond properties located on the waterfront. Even businesses located in high-rise buildings are not immune to losses sustained due to flooding. The storm had many tragic consequences, but it also provided valuable lessons for evaluating both your insurance and business continuity plans.

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.