Effective January 1, 2017, the minimum wage to be paid to workers performing work on or in connection with Federal contracts covered by Executive Order 13658 will be $10.20 per hour. The U.S. Department of Labor announced the increase in the federal contractor minimum wage in today’s Federal Register. Continue reading Federal Contractor Minimum Wage Rises to $10.20
Today, the FAR Council and the Department of Labor issued final regulations and final guidance implementing Executive Order 13673 – Fair Pay and Safe Workplaces. https://www.dol.gov/newsroom/releases/opa/opa20160824 The interlocking final regulations and final guidance, with an effective date of October 25, 2016, impose new requirements on federal contractors and subcontractors, including:
- Contractors, when bidding on new federal contracts valued at more than $500,000, will be required to disclose a three year look-back of all “labor law violations” (involving defined administrative merits determinations, civil judgments, and arbitral awards) arising under 14 different federal statutes and comparable state laws to the contracting officer. The contracting officer, with the assistance of a newly created Agency Labor Compliance Advisors, will review the labor law violations, determine whether the violations are serious, repeated, willful, or pervasive, and based on those determinations, decide whether the contractor is “responsible” enough to be awarded a federal contract.
- Subcontractors, with subcontracts worth more than $500,000, will be required to make similar three year look-back disclosures of labor law violations to the U.S. Department of Labor for that federal agency to make a determination as to whether the subcontractor’s history of labor law violations are serious, repeated, willful, or pervasive. The prime contractor is then required to making its own decision as to whether its subcontractors are “responsible” based on the Department of Labor’s determinations.
- Contractors and subcontractors with serious, repeated, willful, or pervasive labor law violations may be required to enter into labor compliance agreements – either before or after contract award – with designated federal agencies to mitigate or remediate histories of non-compliance as a condition to being deemed “responsible” to receive a federal contract or subcontract.
There are also new requirements concerning (1) Paycheck Transparency (what information must be listed on an employee’s or independent contractor’s paycheck); and (2) prohibitions on the use of arbitration to resolve employee claims unless the employee and contractor agree to use arbitration after the employee has a claim (effectively negating many pre-employment or company-wide arbitration agreements and plans).
The regulatory requirements outlined above have varied phase in periods, beginning October 25, 2016 through October 25, 2017. The final regulations and guidance will be published in tomorrow’s Federal Register.
We will be issuing a comprehensive Alert, with a more detailed analysis of this intricate and complicated regulatory scheme, soon.
Duane Morris special counsel Michael J. Schrier of the firm’s Washington, D.C. office will present on the “Prevailing Wage Requirements in Government Construction Contracts” during the American Bar Association (ABA) Section of Public Contract Law Annual Meeting on Friday, August 5, 2016, in San Francisco, California. Mr. Schrier’s presentation will take place from 7:00 a.m. to 8:30 a.m.
For more information on this program, please see the event listing on DuaneMorris.com.
On February 25, 2016, the U.S. Department of Labor published a Notice of Proposed Rulemaking implementing Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors. The proposed rule (Proposed 29 C.F.R. Part 13) creates an employee right – for both hourly and salaried employees – to accrue and use paid sick leave while working on federal contracts. The proposed rule also imposes a complex regulatory scheme, with new federal contracting clauses created by the Department of Labor, on contractors to enforce the newly created employee rights. The salient points of the proposed rule are as follows: Continue reading Establishing Paid Sick Leave for Federal Contractors: New Proposed Regulations
On January 22, 2016, the FAR Council promulgated proposed regulations that prohibit contractors and subcontractors from contractually barring their employees and subcontractors from reporting fraud, waste, or abuse to federal authorities concerning nonclassified information or programs. Continue reading Proposed Regulations Attempt To Bar Contractor Employee Internal Confidentiality Agreements
Government contractors, while performing work under their federal contracts, may enjoy a form of “derivative sovereign immunity” from private litigation provided certain prerequisites are met. However, as explained in a recent Supreme Court case, no immunity may be had from suits by allegedly injured third parties when “a contractor violates both federal law and the Government’s explicit instructions.” Continue reading Government Contractors Do Not Enjoy “Governmental Immunity” When They Violate Both Federal Law And Explicit Government Instructions