Labor & Employment

On November 30, 2021, the United States District Court for the Eastern District of Kentucky, in Kentucky v. Biden, et al., No. 3:21-cv-00055, granted a preliminary injunction limiting the enforcement of the federal vaccine mandate for some federal contractors and subcontractors. The preliminary injunction was requested by the Commonwealth of Kentucky, the State of Ohio, and the State of Tennessee. As a result, the court enjoined the federal government “from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee” pending further briefing and a full resolution of the case on its merits.

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As predicted, another Obama Administration “oldie but goodie” has made a return in the Biden Administration.  On November 18, 2021, President Biden issued a new Executive Order entitled “Executive Order on Nondisplacement of Qualified Workers Under Service Contracts.” Many of the same concepts and requirements have returned, but there are also several notable changes.

President Biden’s September 9, 2021 Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, directs the federal Safer Federal Workforce Task Force (“Task Force”) to develop COVID-19 workplace safety guidance for federal contractors and subcontractors providing services to or for the federal government. The Executive Order requires the guidance to apply broadly, not only to contracts governed by the Federal Acquisition Regulations (“FAR”), but also to “contracts and contract-like” instruments not covered by the FAR. The Executive Order also directs the Federal Acquisition Regulatory Council to develop new contract clauses that will incorporate the Task Force’s guidance into new and newly-amended federal contracts.

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On September 9, 2021, President Biden held a press conference introducing the administration’s “Plan to Stop the Delta Variant and Boost COVID-19 Vaccinations.” At this conference, the President announced a pair of executive orders that mandate COVID-19 vaccinations for (1) employees of the executive branch of the federal government and (2) employees of federal contractors and subcontractors, and also announced a forthcoming Emergency Temporary Standard (ETS) issued by the Occupational Safety and Health Administration (OSHA) regarding vaccinations and/or routine testing for employers with more than 100 employees.

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For years, I have been blogging and speaking about the very real and very serious civil and potential criminal consequences of a failure to comply with the Davis Bacon Act.  Every once in a while, a case comes along that drives those points home.  One such case – involving criminal convictions for wire fraud and conspiracy to commit wire fraud in connection with what appears to be a blatant failure to comply with Davis Bacon Act requirements – is the recent decision in United States v. Estepa, No. 19-12272 (11th Cir. May 25, 2021).

On April 27, 2021, President Biden issued a new Executive Order that raises the federal contractor minimum wage to $15 per hour, from the current $10.95 per hour, starting January 30, 2022.

Biden’s new Executive Order is nearly a word for word retread of the Obama Administration’s Executive Order 13658 (originally setting a $10.10 federal contractor minimum wage), with some notable exceptions:

  • The federal contractor minimum wage is raised to $15 per hour starting January 30, 2022
  • The current tipped worker federal contractor minimum wage, setting a lower hourly minimum wage just for tipped workers, is phased out by January 1, 2024; and
  • The Trump Administration exemption for certain “recreational services on federal lands” (Executive Order 13838) is revoked.

What remains the “same” is the following:

Affirmative action requirements waived for contracts specifically related to COVID-19 relief

As in past times of national emergency, the Office of Federal Contract Compliance Programs has stepped up to exempt certain new federal supply and service contractors and subcontractors from having to comply with most OFCCP requirements over the course of the contract. Announced March 17, OFCCP calls the action the “National Interest Exemption.” Contractors providing supplies and services specifically related to COVID-19 relief must still abide by OFCCP’s non-discrimination and non-retaliation obligations and are subject to OFCCP complaint investigations. The exemption extends to the obligations of all three laws enforced by OFCCP: Executive Order 11246, § 503 of the Rehabilitation Act, and § 4212 of VEVRAA.

Paying workers as independent contractors instead of as employees may land a former executive in jail for criminal wire fraud. On June 12, 2019, the former operations manager and vice president of a Florida-based mail transportation contractor pled guilty to two counts of wire fraud related to such treatment. The Government’s case was based on pricing estimates for employee-related costs that the contractor later did not incur because it instead used independent contractors.

In the June 1, 2018 indictment of Alexei Rivero, the Government contended that Rivero purposely misclassified the drivers it hired as independent contractors. According to the indictment, this allowed the contractor to “misappropriate” $1.5 million in USPS contract payments “designated” for fringe benefits and $1.2 million designated for payroll taxes.

On August 29, 2017, the White House Office of Management and Budget announced that it would immediately pause the pay-data collection requirement of the revised EEO-1 form that was scheduled to take effect in March 2018. The data collection requirement would have significantly expanded employers’ reporting obligations to the EEOC to include pay data by gender, race and ethnicity on the annual EEO-1 form. The EEO-1 is required of employers with 100 or more employees and federal contractors and subcontractors with 50 or more employees.

The expanded EEO-1 reporting requirements had their genesis in an April 8, 2014 Presidential Memorandum, which directed the Secretary of Labor to propose “a rule that would require Federal contractors and subcontractors to submit to DOL summary data on the compensation paid their employees, including data by sex and race.” In a January 29, 2016 fact sheet, the Obama administration explained that the heightened EEO-1 reporting requirements would “help focus public enforcement of our equal pay laws and provide better insight into discriminatory pay practices across industries and occupations.”

President Trump’s OMB sees things differently. In its memorandum halting implementation of the proposed rule, OMB says that the heightened reporting requirements “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.” Further, these burdens outweighed any benefit that might come from implementing the expanded requirements at this time. OMB directed the EEOC to submit a new information collection package for the EEO-1 form for OMB’s review and to publish a notice in the Federal Register confirming that businesses may use the previously approved EEO-1 form in order to comply with their FY 2017 reporting obligations.