{"id":14469,"date":"2022-07-08T19:19:33","date_gmt":"2022-07-08T19:19:33","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2022\/07\/08\/federal-contractor-maximus-says-hands-tied-on-wages-after-workers-protest\/"},"modified":"2026-08-08T04:40:17","modified_gmt":"2026-08-08T04:40:17","slug":"federal-contractor-maximus-says-hands-tied-on-wages-after-workers-protest","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/govcon\/2022\/07\/08\/federal-contractor-maximus-says-hands-tied-on-wages-after-workers-protest\/","title":{"rendered":"Maximus says hands tied on wages after Medicare call center workers protest"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2014 For several months, <a href=\"https:\/\/www.federaltimes.com\/govcon\/contracting\/2022\/06\/17\/federal-call-center-employees-protest-over-wages-at-maximus-headquarters\/\" target=\"_blank\">call center workers<\/a> for Maximus have been organizing to demand better pay and benefits from the federal contractor that operates help lines for Medicare beneficiaries and Affordable Care Act customers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In June, more than 40 employees protested outside company headquarters in Tysons, Virginia. A month earlier, Maximus workers in Louisiana and Mississippi staged <a href=\"https:\/\/cwa-union.org\/news\/federal-call-center-workers-organizing-cwa-strike-against-maximus\" target=\"_blank\">two-day strikes<\/a> and planned meetings to discuss forming a union.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The workers are seeking higher wages and lower health care insurance deductibles. Maximus said it has addressed the demands by honoring President Joe Biden\u2019s <a href=\"https:\/\/www.whitehouse.gov\/briefing-room\/statements-releases\/2022\/01\/28\/statement-by-president-joe-biden-on-15-minimum-wage-for-federal-workers-and-contractors-going-into-effect\/\" target=\"_blank\">Executive Order <\/a>calling for $15 federal minimum wage for federal contract workers, which went into effect in January. The company also halved deductibles to $2,500 in April. Workers still say the moves are not enough to combat rising costs due to inflation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Maximus said it is limited in its ability to offer more by the <a href=\"https:\/\/www.dol.gov\/agencies\/whd\/government-contracts\/service-contracts\" target=\"_blank\">McNamara-O\u2019Hara Service Contract Act.<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cMaximus\u2019 ongoing efforts to improve employee wages and benefits are limited by the outdated provisions of the Service Contract Act,\u201d said Eileen Rivera, a Maximus spokesperson, in a statement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cAs the SCA was last updated in 1976, we continue to strongly urge Congress and the Biden Administration to make improvements including: aligning health benefits with Affordable Care Act health plans; addressing wage compression for jobs paying above the minimum wage; and adjusting wage rules so teleworkers can be paid prevailing wages based on where they live instead of where the business is located,\u201d she said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The act affects other federal service contracts, not just Maximus\u2019, which has recently been at the center of union organizing efforts by employees. The SCA was passed in 1965 to set a <a href=\"https:\/\/www.federaltimes.com\/2022\/07\/08\/gop-measure-would-stop-federal-contractor-minimum-wage-from-becoming-permanent\/\" target=\"_blank\">floor for compensation<\/a> to protect workers. That floor can also become a de facto ceiling in some cases.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIn a nutshell, what makes some of these SCA-governed contracts difficult is that they\u2019re relatively rigid and inflexible,\u201d said <a href=\"https:\/\/www.pscouncil.org\/a\/Bios\/PSC_Staff\/Stephanie_Sanok_Kostro_Bio.aspx\">Stephanie Kostro<\/a>, executive vice president for policy for the Professional Services Council, a trade group for the government technology and professional services industry.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.dol.gov\/agencies\/whd\/government-contracts\/service-contracts#:~:text=The%20McNamara%2DO%E2%80%99Hara%20Service,the%20rates%20(including%20prospective%20increases)\" target=\"_blank\">The act <\/a>requires businesses performing services on contracts in excess of $2,500 to pay employees no less than the wage rates and fringe benefits found prevailing in the location where work is being performed. It incorporates the Department of Labor\u2019s wage determinations, which are usually updated annually but don\u2019t always reflect the latest inflation rate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cEverything in there is a minimum,\u201d said Todd Whay, a Virginia-based attorney who represents contracting issues. \u201cThey\u2019ll have a minimum number of sick days, a minimum number of holidays, vacation and other fringe benefits.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Though the SCA does not bar contractors from exceeding minimum compensation, Whay said price is often paramount in a competitive environment, so contractors may choose to stick closely to the minimum determined wage.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe government is looking for the cheapest contractor,\u201d Whay said. \u201cWhat your competitors are likely going to offer is going to be the bare minimum in terms of wages.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Maximus also said that it\u2019s the role of contracting officers to achieve \u201cbest value,\u201d defined as the trade-off between cost and performance, and often influenced by competition.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cBecause of the legal requirement that contracts be awarded to the lowest responsible bidder \u2026 contractors who wish to maintain an enlightened wage policy may find it almost impossible to compete for government service contracts,\u201d according to a<a href=\"https:\/\/static1.squarespace.com\/static\/5a6619f32278e7a092c86335\/t\/5a6668cfe4966b9ab1c9b8e0\/1516660944079\/A+Short+History+of+the+Service+Contract+Act.pdf\" target=\"_blank\"> report <\/a>from the House Education and Labor Committee when the SCA became law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If a contractor elects to increase compensation, it won\u2019t necessarily be reimbursed because the government, as the buyer, has already budgeted for the value of labor under the contract, PSC\u2019s Kostro said. Contractors who expect to recover costs from boosting wages go through the process of requesting an equitable adjustment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWhen you have a wage determination and given wage rates that are relatively rigid, whether you can ask for a price adjustment depends on whether you have that ability already written into your contract,\u201d she said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In March, the General Services Administration placed a <a href=\"https:\/\/www.gsa.gov\/cdnstatic\/MV-22-02.pdf\" target=\"_blank\">moratorium on limiting<\/a> requests for adjustments, acknowledging the impact of inflation and supply chain disruptions. That remains in effect until September. Kostro said it acts as a relief valve for some of the economic and workforce pressure imposed by costs-of-living and employees opting for higher-paying jobs in the commercial sector.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Other agencies have also responded to inflation\u2019s warping of costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In May, the Department of Defense issued an <a href=\"https:\/\/www.insidegovernmentcontracts.com\/2022\/06\/dod-releases-guidance-on-inflation-and-economic-price-adjustments-for-fixed-price-contracts\/\" target=\"_blank\">acquisition memo<\/a> generally discouraging contracting officers from granting adjustments due solely to inflation. It did, however, preserve modest options for fixed-price contracts that contain an economic price adjustment clause. The Pentagon also said it encourages contracting officers to consider inserting economic price adjustment clauses in new solicitations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cInflation is far outpacing anything that was anticipated or planned for within the federal government\u2019s budget,\u201d Kostro said.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Maximus workers have demanded higher wages and better benefits due to the effects of inflation. However, Maximus said it is limited in its ability to offer more by a law from 1965.<\/p>\n","protected":false},"author":7,"featured_media":32319,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":0,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[60,12,31,15,33],"tags":[],"coauthors":[3269],"class_list":["post-14469","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-contracting","category-govcon","category-home","category-management","category-newsletters"],"acf":{"subheadline":"","legacy_arc_id":"KBB6IZQESFG35E6CVOR7YE5F7U","arc_canonical_url":"\/govcon\/contracting\/2022\/07\/08\/federal-contractor-maximus-says-hands-tied-on-wages-after-workers-protest\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Maximus says hands tied on wages after Medicare call center workers protest - Federal Times<\/title>\n<meta name=\"description\" content=\"Maximus workers have demanded higher wages and better benefits due to the effects of inflation. 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