Labor Category Audit

When most people hear the word “audit”, they think of “accounting”.  However, it is important to remember that companies can be audited by the Government for labor category qualifications for Time and Materials (T&M) contracts. If the employee does not qualify for a labor category, the company will have to reimburse the Government for the difference between amount billed and amount that should have been billed depending on actual labor category qualification. Here is one process for handling Labor Category Qualifications.

1) Keep a log that includes at a minimum:

▪ Candidate/employee’s name
▪ Contract number
▪ Desired labor category
▪ Qualification requirements (education and experience)
▪ Education achieved (H.S., AA Degree, BA/BS, Master’s, PhD)
▪ Years of experience
▪ Approved (Yes/No)
▪ Reviewer for accountability reasons
▪ Date of approval/non-approval

2) Complete a form that includes the information from the items listed above and attach this to the candidate’s/employee’s resume.

3) Forward/E-mail the completed form and resume to HR before a candidate is hired or an employee is promoted.

4) Keep a soft and hard copy of the documents for the contractual records. For the hard copy, I recommend that you keep a notebook. Create a separate section for each contract and/or task order


For questions or comments, please contact Streamline at KLong@StreamlineGovCon.com or 240-644-5314. We welcome your feedback including other topics of interest.

This blog is for informational purposes only. None of the content is, or will be deemed to constitute legal opinions or legal advice.


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