Federal Contractors Must Follow New Rules on Fair Pay and Other Workplace Protections

Aug 26 2016 - Compensation, Health and Safety, Workplace Policies - Gail Cecchettini Whaley

Federal Contractors Fair Pay Other Workplace Protections New Rules

One rule went into effect last week – make sure you are up-to-date.

Federal contractors need to be aware of new rules that will affect how they do business.

First, the Department of Labor has issued final rules and guidance on the Fair Pay and Safe Workplaces Executive Order. The intent of this Executive Order is to ensure that parties who contract with the federal government are complying with laws that protect workers’ safety, wages and civil rights.

Among other things, government contractors interested in submitting bids are required under this rule to publicly disclose information on their labor law violation history. This information will be used to determine whether the prospective contractors are “responsible sources” who should be awarded contracts. If contractors are not in compliance, the government can refuse to award contracts, cancel existing contracts or work with contractors to address issues that can be remedied and provide compliance information. This new rule has often been referred to as the “blacklisting” or “bad actors” executive order.

The rule applies to contracts and subcontracts valued at more than $500,000.

Prospective contractors must demonstrate compliance with a wide variety of federal laws, including, but not limited to, the Fair Labor Standards Act, the Family and Medical Leave Act, Occupational Safety and Health Administration, Title VII, the National Labor Relations Act, and the Americans with Disabilities Act. The Executive Order initially also covered equivalent state law violations. However, disclosure of state law violations is not part of the final rulemaking and will be the subject of future rulemaking.

The new rule also requires federal contractors and subcontractors to provide wage statements to covered workers, giving them information on hours worked, overtime hours, pay and any additions or deductions made from their pay.

This final rule takes effect October 25, 2016 and there is a phased-in implementation schedule.

Companies with federal contracts of this size are advised to contact labor and employment counsel regarding their obligations. More information on this new rule can be found on this DOL dedicated webpage.

Second, the Office of Federal Contract Compliance Programs (OFCCP) recently announced a final rule that sets forth updated rules relating to nondiscrimination on the basis of sex. The rules were updated to make them more consistent with current law and the realities of today’s working environment. The rule became effective August 15, 2016.

The rule generally applies to any business or organization that (1) holds a single federal contract, subcontract or federally assisted construction contract or subcontract in excess of $10,000; or (2) holds federal contracts or subcontracts that have a combined total in excess of $10,000 in any 12-month period.

According to the OFCCP, the new rules address a variety of sex–based barriers to equal opportunity and fair pay in the workplace, including:

  • Compensation discrimination;
  • Ssexual harassment;
  • Failure to provide workplace accommodations for, or other kinds of discrimination because of, pregnancy, childbirth or related medical conditions;
  • Discrimination on the basis of gender identity and transgender status;
  • Family caregiving discrimination; and
  • Stereotypes based on gender norms like dress and appearance.

Federal contractors can find more information on the OFCCP’s dedicated webpage.

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

CalChamber members can read more about Wage and Hour Requirements for Government Contractors. Not a member? See how HRCalifornia can help you.

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