Final Regulations, Guidance to Ensure Federal Contractors Better Comply with Workplace Rights, Protections

Thursday, August 25, 2016

The U.S. Department of Labor and the Federal Acquisition Regulatory Council announced final regulations and guidance implementing the Fair Pay and Safe Workplaces Executive Order to ensure that federal contractors better comply with laws that protect their workers’ safety, wages and civil rights.

Signed by President Obama in July 2014, the order requires prospective federal contractors to disclose labor law violations and gives agencies more guidance on how to consider labor violations when awarding federal contracts. It directs the department and the council to issue regulations and guidance to implement the new requirements.

The regulations and guidance are designed to increase efficiency and cost savings by ensuring that federal contractors are responsible and provide basic workplace protections. The guidance also creates a process for agencies and the department to help contractors come into compliance with labor laws. In crafting the final regulations and guidance, department and council received and considered thousands of comments from members of the public, including many in the contracting community.

Contractors are already required to disclose findings of fault and liability made in administrative or civil proceedings; however, current disclosures do not give a full picture of the contractor’s labor compliance track record and leave agencies vulnerable to making awards to contractors that cheat their workers, competitors and the taxpayers.

With the new rule phased in fully, prospective contractors will be required to disclose violations of 14 basic workplace protections from the previous three years – including those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections. The final rule will make sure that federal agencies have the information they need to determine which contractors are meeting their responsibilities to workers.

In addition to setting up a process to effectively consider labor law violations, the order requires that contractors' employees are given the necessary information each pay period to verify the accuracy of their paycheck. It also ensures that workers who may have been sexually assaulted or had their civil rights violated get their day in court, putting an end to mandatory pre-dispute arbitration agreements covering these claims at large federal contractors.

To help contractors come into compliance with labor laws, the regulations and guidance build on the existing procurement system. Most federal contractors will only have to attest that they comply with laws providing basic workplace protections. Designated Agency Labor Compliance Advisors will be available to help contractors who do report violations and coordinate with the relevant enforcement agency experts to help them come into compliance.

The final regulations will be effective on Oct. 25, 2016, and be implemented in phases to give contractors time to understand their responsibilities.

The week of Sept. 12, 2016, the department will begin a pre-assessment process for contractors that anticipate competing for future federal contracts. The department will be available to discuss existing labor law violations and whether additional compliance measures are warranted.

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