Federal Fair Pay and Safe Workplaces Rule Temporarily Stopped

Oct 26 2016 - Compensation, Reporting Requirements - Gail Cecchettini Whaley

Federal Fair Pay Temporarily Stopped

Implementation and enforcement of the labor law disclosure requirements has been temporarily halted.

A federal rule that was set to take effect yesterday was halted, at least temporarily, by a federal court in Texas. The Fair Pay and Safe Workplaces rule implements a federal executive order and requires parties who wish to contract with the federal government to publicly disclose information on their labor law violation history.

The information will be used to determine whether the prospective contractors are “responsible sources” who should be awarded contracts. The rule applies to contracts and subcontracts valued at more than $500,000. This new rule has often been referred to as the “blacklisting” or “bad actors” executive order.

Under the rule, 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. There are also restrictions on arbitration agreements.

The rule was set to take effect on October 25, 2016 with a phased-in implementation schedule. However, industry groups challenged the rule and a Texas court temporarily stopped the implementation and enforcement of the labor law disclosure requirements until a final determination can be made by the court.

The Department of Labor has stated that it believes the rule is legally sound and is “considering options for next steps.”

The court did not, however, enjoin the “paycheck transparency” provisions of the final rule. These provisions require federal contractors and subcontractors to provide wage statements to covered workers, giving them information on hours worked, overtime hours, pay, any additions or deductions made from their pay and whether they have been classified as independent contractors. These provisions will still be effective on January 1, 2017.

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

CalChamber members can read more on Wage and Hour Requirements for Government Contractors in the HR Library. Not a member? See how CalChamber can help you.

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