The FAR Council and the Department of Labor have published the final versions of their respective final rule and DOL guidance implementing the President’s July 2014 Executive Order entitled “Fair Pay and Safe Workplaces”—EO 13673.

Detractors frequently refer to EO 13673 as the “Blacklisting” or “Bad Actors” Executive Order. The order and the new regulations purport to promote efficiency in government procurement by ensuring that federal agencies contract only with “responsible” contractors that comply with federal and state workplace protection laws.

This objective is already a well-established requirement of the government’s procurement rules. The regulations impose additional administrative burdens on current and future contractors, adding an element of uncertainty to future contract award decisions, but only achieving marginal improvements in workplace law compliance. Continue Reading Fair Pay and Safe Workplaces—the final rules implementing Executive Order 13673

A new Final Rule addressing sex discrimination in employment by federal contractors and subcontractors will go into effect on August 15, 2016. The new Final Rule was published by DOL’s Office of Federal Contract Compliance https://www.contractorsperspective.com/construction-contracting/dc-circuit-rules-that-the-davis-bacon-act-does-not-apply-to-public-private-partnership-project/Programs. It implements Executive Order 11246, which has been essentially unchanged since it was first issued in 1970. OFCCP’s new rules and guidelines include several significant changes from the 1970 version, but the changes are primarily intended to update DOL requirements so that they conform to well-established federal caselaw and other more recently enacted federal requirements.

Who is affected?

OFCCP’s new Final Rule on sex discrimination applies to any business or organization that (1) holds a single Federal contract, subcontract, or federally assisted construction contract in excess of $10,000; (2) has Federal contracts or subcontracts that, combined, total in excess of $10,000 in any 12-month period; or (3) holds Government bills of lading, serves as a depository of Federal funds, or is an issuing and paying agency for U.S. savings bonds and notes in any amount.

What does the Final Rule address?

As they have for many years, DOL’s regulations require contractors to ensure nondiscrimination in employment on the basis of sex and to take affirmative action to ensure that they treat applicants and employees without regard to their sex. The new Final Rule is much more specific.

Continue Reading Contractor guide to compliance with OFCCP’s new final rule on sex discrimination

We have previously written about the Department of Labor’s effort to expand the scope of its regulatory and enforcement jurisdiction over government contractors against the wishes of Congress and even fellow federal agencies. The United States Court of Appeals for the District of Columbia struck down an attempt by the DOL to significantly expand the Davis-Bacon Act to apply to the construction of a Public-Private Partnership project. The Davis-Bacon Act requires that contractors on federal and DC government construction projects pay prevailing wages and fringe benefits to the workers on such projects. DOL sought to apply the Act to CityCenterDC, which is a mixed-use development on the site of the DC Convention Center. This project includes 60 retail stores, various private offices, approximately 700 residential units, and a 370-room luxury hotel.  Continue Reading DC Circuit rules that the Davis-Bacon Act does not apply to Public-Private Partnership project

Contractors will have more forms to fill out, and possibly some explaining to do, when the recently issued Executive Order on Fair Pay and Safe Workplaces is fully implemented in 2016. The Executive Order requires offerors to disclose whether they have been found to have violated, within the past 3 years, any of 14 different labor laws.

Covered laws include:  Fair Labor Standards Act, Occupation Safety and Health Act, Davis Bacon Act, Service Contract Act, Americans with Disabilities Act, and a host of others. Violations of equivalent state laws must also be reported.

An offeror with violations will be provided an opportunity to disclose steps it has taken to correct the violations or improve compliance. The procuring contractor officer will take this into account in determining the offeror’s responsibility.  The contractor will need to update its disclosure every six months.

Agencies are also required to ensure that contractors (and their subcontractors) provide their employees with “paycheck transparency,” providing a document to each employee that shows the hours worked, overtime hours, pay, and any additions or deductions made. Contractors must also state in writing if an individual is considered an independent contractor and not an employee.

These requirements apply to contracts and subcontracts valued at $500,000 or more. GSA is charged with developing a single website for contractors to use in meeting these new reporting requirements.

For contracts (and subcontracts) valued at $1 million or more, contractors may not require that their employees arbitrate claims relating to Civil Rights violations, sexual assault, or harassment. (Once such a claim has arisen, the parties can mutually agree to arbitrate the claim.)  This restriction, however, does not apply to employees who are covered by a Collective Bargaining Agreement.

The Executive Order is effective now, but the reporting requirement is not expected to begin until 2016, after the development of FAR regulations and clauses. Since the disclosure form has a 3-year look back period, violations that occurred in 2013 would be subject to the reporting requirement.

Contractors need only report adjudicated labor law violations:  a civil judgment, arbitral award, or administrative merits determination that the contractor violated a covered labor law. Settlements of alleged labor law violations are not reported. The Executive Order thus places further pressure on contractors to settle such claims rather than risk a reportable violation.

President Obama signed an Executive Order raising the minimum wage for employees of federal contractors on February 12, 2014. Our earlier entry on the issue discusses how a higher minimum wage will affect current contractors. It looks like more waiting will be required before the true impact will be known.

The Executive Order calls for the Secretary of Labor and the FAR Council to draft regulations and contract provisions implementing the new minimum wage and to publish them later this year. But the Executive Order also includes some useful guidance.

Here are the key takeaways—

Continue Reading Obama’s Executive Order on the new federal contractor minimum wage

Jurisdictional issues arising from disputes about wages and benefits required by federal minimum wage statutes like the Davis-Bacon Act and the Service Contract Act can be tricky. In some cases, the Department of Labor has exclusive power to resolve such disputes. In others, the dispute must be resolved by the contracting officer, with appeal rights available under the Contract Disputes Act. The ASBCA’s recent decision in Caddell Constr. Co., ASBCA No. 57831 (May 21, 2012) [pdf] helps determine which cases fall on either side of this line.

The case arose from an Air Force contract to build a new commissary and related site work at Fort Campbell, Kentucky. The solicitation included two wage determinations—one for highway construction with low wage rates and another for building construction with much higher wage rates. Prior to bid, the agency told bidders to use the lower highway construction wage determination. During performance, the contracting officer required the contractor to pay wages according to the higher wage determination for building construction.

The contractor submitted a claim in accordance with the Contract Disputes Act. At the Board, the government moved to dismiss the appeal, arguing that such labor disputes are reserved to the Department of Labor. The Board denied the motion, holding that the Board has jurisdiction to hear disputes over wage issues “where there was an alleged mistake (mutual or unilateral) as to the applicability of the Davis-Bacon Act to appellant’s employees.” The Board concluded that it had jurisdiction to hear the contractor’s claim to recover additional wages paid to employees as a result of faulty wage rate information provided to bidders before submission of bids.

But why is this important?

Continue Reading DOL isn’t the only game in town; Contract Disputes Act jurisdiction for wage disputes

The FAR Council has proposed a new FAR Subpart 22.12 addressing Executive Order 13495 and the Department of Labor’s final rule [pdf] on nondisplacement of qualified workers. The proposed amendments restate the substance of the Executive Order and the DOL rule, omitting only the procedures for investigation and enforcement that do not pertain directly to contract administration. A new mandatory contract clause will incorporate the nondisplacement policy into all contracts and subcontracts at any tier to furnish services in the United States that succeed contracts for the same or similar work in the same location (unless an exemption or waiver applies).

The new FAR language does not address the apparent conflict between the policy requirement for nondisplacement of qualified workers and the requirement to accept the terms of an existing collective bargaining agreement under the NLRB’s “perfectly clear” doctrine. The “perfectly clear” doctrine states that a successor employer is bound by the terms of a collective bargaining agreement when it is “perfectly clear” that the successor will retain all employees in the bargaining unit without changes to the terms and conditions of employment. This differs from a normal successor employer, which is required to bargain with the union but not to comply with the existing collective bargaining agreement. 

Continue Reading Collective bargaining under proposed FAR rules on nondisplacement of qualified workers

The National Defense Authorization Act for Fiscal Year 2012 [pdf] puts an end to OFCCP’s effort to impose subcontractor status on retail pharmacies and health care providers serving TRICARE beneficiaries. The controversy had been brewing for some time. As we discussed in an earlier client alert, the October 2010 decision in OFCCP v. Florida Hospital, No. 2009-OFC-00002 (DOL Oct. 18, 2010) [pdf] concludes that a TRICARE network hospital is a subcontractor despite contract language indicating the federal government’s agreement to the contrary. Directive 293 expresses OFCCP’s intention to disregard party determinations of subcontractor status and to control the determination itself. Section 715 of the 2012 NDAA ends the uncertainty on this issue. Under the legislation, TRICARE network service providers and suppliers may not be considered subcontractors:

For the purpose of determining whether network providers under such provider network agreements are subcontractors for purposes of the Federal Acquisition Regulation or any other law, a TRICARE managed care support contract that includes the requirement to establish, manage, or maintain a network of providers may not be considered to be a contract for the performance of health care services or supplies on the basis of such requirement.

Husch Blackwell’s client alert on the new legislation is available here.

 

UPDATE: DOL later took the position that this statute did not limit the subcontractor status of TRICARE providers. In April 2014, DOL retreated from that position in response to Congressional oversight and imposed a five-year moratorium on enforcement actions against TRICARE hospitals and other providers. These developments are discussed in more detail in our April 4, 2014 article on Healthcare Law Insights.

The Department of Labor has announced its final rule [pdf] implementing Executive Order 13495 [pdf], which addresses nondisplacement of qualified workers under federal service contracts. Under the DOL rule, federal contractors and subcontractors on service contracts over the $150,000 simplified acquisition threshold will be required to offer employment to non-managerial employees whose employment would otherwise end at the close of the predecessor contract.

Continue Reading The impact of DOL’s final rule on nondisplacement of qualified workers

Activity by the Office of Federal Contract Compliance Programs points directly toward a new focus on discrimination in employee compensation. A settlement with AstraZeneca involving pay disparities averaging only $1,700 requires the company to conduct additional statistical analyses of pay for hundreds of employees. OFCCP rescinded the 2006 standards for assessing pay discrimination and published an advance notice of proposed rulemaking announcing a new data collection tool to identify potential pay discrimination. OFCCP Director Patricia Shiu articulates the plan in just a few words: “aggressively going after employers who discriminate.” We discuss these issues in a new client alert, available here.