How government contractors can avoid Apex Systems $1.5M mistake

Prevailing Wage Laws and Violations


Apex Systems is a staffing agency that specializes in IT. In 2019 the company was subcontracted by Perspecta Inc. to provide network systems development and support on military bases in 17 states. In June of 2019 the U.S. DOL & WHD required the company to pay $1.5M in back wages to 209 employees for violating provisions in both the Fair Labor Standards and McNamara-O’Hara Service Contract Acts.

So where did Apex Systems go wrong? The company failed in two ways. First they incorrectly classified “computer support technicians” and paid them the lower rate of “computer operators.” Second they failed to provide employees the appropriate fringe benefits as outlined by the SCA.

Both of these mistakes could have been easily avoided with proper planning at the outset. When bidding for and securing government contracts it is critical to understand both employee roles and compensation rates as well as appropriate fringe benefits packages. That’s where we come in, at Archer Jordan we exist to ensure the compliance of your company, protection of your workforce and profitability of your business.

5-Easy Steps to Fringe Benefit Compliance

In this FREE guide we’ll show you how to create a fringe benefit plan that secures your business