Turning Labor Compliance Into A Competitive Advantage

LPTA

Presented by Jim Campbell

WelcomeWe are all searching for the best way to thrive in a difficult LPTA market. By properly allocating resources to more efficiently manage compliance you can reduce overhead,

improve contract profitability, and avoid costly fines and debarments. This presentation will focus on turning compliance into competitive advantage.

Jim Campbell - President / CEOAxim Fringe Solutions Group, LLC

@aximfsg

linkedin.com/in/jvcampbell

Presentation BlueprintCompliance as a Competitive Advantage

1 Compliance Tracking Model

The Cost of Noncompliance

Suspensions & Debarments

DOL Enforcement / Direction

Fair Play & Safe Workplaces EO

ACA Impacts

The Compliance Solution

Fringe Dollar Management

2

3

4

5

6

7

8

Compliance Technology9

Improving Contract Profitability10

Compliance Tracking ModelHow Do You Measure Up?

Training

Risk MappingAssessment

Periodic Reviews AuditsInternal or external

Full CooperationWith Government in event

of investigation / audit

Timely ReportingTo the Government

Disciplinary ActionFor improper conduct

The Cost of NoncomplianceNoncompliance Can Cripple A Company's Future

1 Fines

4 Debarment from all government contracts for three years

2 Contract termination

3 Withholding of payments

The Rise of Suspensions & DebarmentsThe Government is Stepping Up Compliance

65% Increase Over Past 5 Years 98% Increase Over Past 5 Years

Labor Secretary Thomas E. Perez on DOL Enforcement Strategies - March 2015

“One way to leverage our enforcement resources is to identify the supply chain. The

idea is to cause those at the top of the chain to evaluate their compliance practices

to those below them; and to get them to think twice about whether it is worth the

risk to their good name, and possibly their bottom line, to do business with a

subcontractor who skirts the law.”

The Wage and Hour division (DOL) has requested a 22% budget increase

($227M in FY2015 to about $277M in FY2016). This would provide the agency

with 300 new full-time investigators and upgrades to its technology.

In FY2014, 44% of its investigations were directed (i.e., not complaint-based).

Labor Secretary Thomas E. Perez on DOL Enforcement Strategies - March 2015

“We’ve shifted the focus of our enforcement

efforts. Instead of a purely reactive

approach where we respond to incoming

complaints, we have targeted investigations

in industries where we know workers are

vulnerable, and where they are often

reluctant to raise their voices and exercise

their rights.”

The Fair Pay & Safe Workplaces Executive OrderGoverning NEW federal procurement contracts $500,000+ (2016)

Disclose labor law violations ( past 3 years) with

updates every six months1

Protect responsible contractors4

Promote efficient federal contracting3

Crack down on repeat violators2

Primes will be responsible for checking subs

compliance5

Streamline overall contractor reporting8

Contractors / Subs must provide summary data

on compensation paid to employees7

Government agencies will have a labor

compliance officer6

ACA Impacts on Government ContractorsCost and Compliance Requirements of the Affordable Care Act

Payments don’t count

as employer-provided

health coverage under

the ACA “affordability”

requirement

Cash-in-lieu

Applicable large

employers must decide

whether to “Play” -

provide ins. coverage or

“Pay” a penalty

“Play or Pay” Costs

“Affordable, minimum

value health coverage”

or pay (tax) “shared

responsibility payment”

Employer Mandate

Employee benefits

coverage (30hrs / wk

avg.) can alter insurance

costs & increase

overhead

PT Employees

How Can Compliance Possibly Be A Competitive Advantage?

The Compliance SolutionPartner Up for Success

1 Remove Compliance Burden

Auditable Record Keeping

Offset HR Workload

Improve Bid Opportunities

Protect Your Business

2

3

4

5

Better Fringe Dollar ManagementYour Weapon Against Noncompliance

1 Proper tracking & allocation of fringe dollars (DOL regulations)

4 Prevent an unhappy employee from calling the DOL about their fringe benefits on your behalf

2 Hours worked & fringe dollars accrued

3 Benefits elected & net fringe dollar amount

Compliance TechnologyThe Right Tool for the Job

Steps to Contract ProfitabilitySaving Money Through More Efficient Contracting

LPTA1

Lower Profitability

Reduced Services

Fringe Management2

Better Benefits Planning &

Consulting

DOL Regulations

Strategic Partnerships3

Increase Efficiency On:

Payroll, Compliance,

Benefits, Healthcare Tech

Contract Profitability4

Reduce Overhead

Compliance Assurance

Improve Cost-

Competitiveness

Higher Margins

The Wage and Hour division (DOL) is going to be looking at you.

You need to do as much proactively as possible to make sure

that if the DOL does come knocking, you’re in good shape.

Be aware of your vulnerabilities and take steps to protect yourself.

LPTATurning Labor Compliance Into A Competitive Advantage

Questions?

www.aximfsg.com pverdile@aximfsg.com