What is a Conformance and When Should It Be Used?

Understanding the Conformance Process 

Any contractor who has contracts subject to the Service Contracts Act of 1965 is familiar with the term "Wage Determination" and the obligation to compensate employees according to their labor classification, commonly referred to as "paying the prevailing wage." However, challenges arise when the positions required for the work are not listed in the Wage Determination incorporated into the awarded contract. This raises questions about employee classification and the corresponding wage rates.

This is where the Conformance Process comes into play. Conforming a position entails seeking approval from the Department of Labor to:

1. Use an occupation or position that is not listed in the Wage Determination.
2. Propose an hourly rate for the occupation based on objective research.

Is a conformance process necessary?

The conformance process should be pursued only if there is no job classification in the Wage Determination that accurately describes the duties of the unlisted position(s). Contractors should first consult the Department of Labor's Directory of Occupations and analyze the job descriptions of all relevant labor classifications listed in the Wage Determination to find a suitable match for the position's duties.

If any classification listed in the Directory corresponds to the duties of the occupation in question, the Contractor should classify employees accordingly. Conversely, if none of the classifications in the Directory closely align with the occupation's duties, the Contractor should initiate the Conformance Process.

What materials/information are required?

To begin, the official request must be submitted using Standard Form Number 1444 (SF-1444), which serves as the official "Request for Authorization of Additional Classification and Rate."

The Contractor must also clearly define the job title and duties of the position in question. If a comprehensive job description is not already on file, one should be developed.

The conformance process requires the proposed position's compensation to bear a reasonable relationship to the wage rates listed in the applicable wage determination for occupations with similar skills and work duties. Therefore, the Contractor must analyze the applicable Wage Determination and determine:

1. The broad Labor Category to which the proposed new classification belongs. There are a total of twenty-five (25) Labor Categories, including, but not limited to: Administrative Support and Clerical Occupations (01000), Food Preparation and Service Occupations (07000), General Services and Support Occupations (11000), Health Occupations (12000), Materials Handling and Packing Occupations (21000), Mechanics and Maintenance and Repair Occupations (23000), and Miscellaneous Occupations (99000).

2. Within the chosen Labor Category, identify the labor classifications that most closely resemble the proposed occupation in terms of duties. The Contractor should select all the classifications that are similar to the new unlisted occupation.

3. Find the Federal Grade Equivalent compensation rate for the positions in question, whether in the General Schedule (GS) for white-collar occupations or the Wage Grade (WG) compensation system. This information is available in the Directory of Occupations' Table of Contents and Federal Grade Equivalents.

Armed with this information, the Contractor is now prepared to calculate and propose an hourly rate for the new occupation being requested.

Calculating the rate

Now, it is time for some thorough research. Based on the gathered information, the Contractor must calculate an hourly rate that, as mentioned earlier, bears a reasonable relationship to the rates listed in the Wage Determination. Randomly assigning an hourly rate or proposing a rate that is too low compared to similar occupations will likely result in disapproval of the request.

The Contractor must consider the wages earned by these comparable occupations when proposing a rate.

Final Thoughts

Conformance is a time-consuming and research-intensive process that requires careful and methodical approach. Contractors must consider various factors, including the position's duties, required skill level, and compensation levels of comparable positions.

In my upcoming posts, I will provide a way Contractors can calculate proposed rates as well as how to properly complete and submit a Standard Form 1444. 

- Aaron Ramos, Labor Compliance Officer