Fair Pay and Safe Workplace Final Rule Issued by DOL, FAR Council
Author: Marta Moakley, XpertHR Legal Editor
September 9, 2016
The US Department of Labor (DOL) and the Federal Acquisition Regulatory Council (FAR Council) have issued the Fair Pay and Safe Workplaces final rule and accompanying guidance. This "blacklisting rule" requires immediate action by federal contractors to ensure compliance - which may be required as early as October 25, 2016.
Labor Law Violations and Required Disclosures
According to the DOL, the final rule has been designed to increase efficiency and cost saving in federal contracting by improving contractor compliance with labor laws. The final rule also takes into account public input received during the notice-and-comment regulatory process.
The rule requires a covered government contractor to disclose its labor law compliance history for a three-year look-back period (however, only those violations dating from October 25, 2015, and later must be reported under the rule). The rule also affects subcontractors and concerns direct federal contracts. The final rule does not affect state contracts.
Compliance with 14 federal laws and state equivalents (e.g., OSHA-approved state plans) must be disclosed by existing and prospective federal contractors. These laws include:
- The Fair Labor Standards Act;
- The Occupational Safety and Health Act of 1970;
- The Family Medical Leave Act;
- The Americans With Disabilities Act of 1990;
- The National Labor Relations Act; and
- Title VII of the Civil Rights Act of 1964.
Reportable violations include certain administrative merits determinations (including those that may be appealable), arbitration awards or decisions and civil judgments. The violations need not have occurred during the performance of a federal contract: all covered violations that occurred during the look-back period must be reported.
The contractor must disclose:
- The labor law violated;
- The case number, inspection number, charge number, docket number or other identification number;
- The date rendered; and
- The name of the court, arbitrator, agency, board or commission rendering the determination or decision.
The necessary disclosures would be made on the General Services Administration System for Award Management (SAM), which is already in use by federal contractors for other required disclosures. Once a bid is submitted, a contracting officer initiates a responsibility determination and assesses labor violations. The responsibility determination takes into account additional information concerning a violation, including:
- Mitigating factors;
- Remedial measures; and
- Any other steps taken by the contractor to comply with the law.
Disclosures will have to be updated every six months for the life of the contract. Any violations considered serious, repeated, willful or pervasive could be considered for a remedy (such as a compliance agreement or contract termination) or for possible debarment.
With limited exceptions, the new rule also sets limits on pre-dispute employee arbitration agreements for those federal contractors with contract values over $1 million.
Beginning this Monday, September 12, current or prospective contractors may go to the DOL for a preassessment in anticipation of bids on future federal contracts, which is a voluntary assessment of their labor compliance history.
The final rule takes effect October 25, 2016, when mandatory disclosure and assessment of labor law compliance begins for all prime contractors with a total contract value that is equal to or greater than $50 million. In addition, staggered compliance dates extend into 2017, including implementation of a paycheck transparency requirement (January 1) and the reduction of the contract value threshold to $500,000 (April 25). Covered subcontractors must comply with requirements effective October 25, 2017.