Fair Pay and Safe Workplaces

Just in time for Labor Day, the Labor Department and FAR Council issued a final rule and accompanying “Guidance” to implement the Fair Pay and Safe Workplaces Executive Order.  The new regulations will take effect on October 25, 2016.  The regulations—which run to nearly 900 pages—contain a number of changes from the proposed regulations to demonstrate that the Department listened to stakeholders during the lengthy comment period.

Despite some concessions to industry comments, the final regulations still establish substantial compliance obligations.  In light of those burdens, the contracting community is well advised to invest time to understand these provisions.  In this post, we summarize key changes and examine the way ahead for contractors. 
Continue Reading “Fair Pay and Safe Workplaces” Final Rule and Guidance Released

Congress has weighed in on Executive Order 13673, known officially as the “Fair Pay and Safe Workplaces Order” and unofficially as the “Blacklisting Order.”  While the Office of Management and Budget reviews the Labor Department’s draft of the final regulations and guidance, the House and Senate Armed Services Committees have added language to the Fiscal

On May 4, the Labor Department and Federal Acquisition Regulatory (“FAR”) Council submitted to the White House Office of Management and Budget (“OMB”) their final versions of regulations and guidance (respectively) implementing Executive Order 13673, entitled “Fair Pay and Safe Workplaces” (“FPSW Order”).  The FPSW Order, which requires contractors bidding on government contracts to disclose past violations of any one of at least 14 federal labor laws and their state law counterparts, has been met with harsh criticism from contractors and members of congress since its July 2014 issuance by President Obama.  (See our blog post here for more analysis of the proposed regulations implementing the Order.)  The most recent attack occurred just one week prior to the Labor Department and FAR Council submissions: the House Armed Services Committee adopted an amendment that would exempt the entire Department of Defense (“DOD”) from the FPSW Order.
Continue Reading Battle over “Blacklisting” Order: Obama Administration Moves Forward with Fair Pay Order as House Members Attempt to Exempt DOD

“[W]e respectfully request that no further presidential directives primarily focused on government contractors be issued for the foreseeable future,” wrote four government contractor associations in a letter to the White House dated August 3, 2015. The letter was released publicly on Tuesday, August 11, 2015, and signed by representatives of the Aerospace Industries Association, the National Defense Industrial Association, the Professional Services Council, and the Information Technology Industry Council. The four associations argued that the president’s 12 executive orders pertaining to government contracting, resulting in 16 new regulations, have “significantly increase[d] the costs of doing business with the government.” Illustrating this point, the letter references an estimate that “nearly thirty cents of every contract dollar goes toward compliance with unique government regulations.”
Continue Reading Contractors (Respectfully) Request that the President Stop Issuing Executive Orders Focused on Contractors

The key word is “suffer.”

Government contractors already face painful compliance burdens associated with the Fair Pay and Safe Workplaces Executive Order, the proposed implementing regulations, and the Labor Department’s “Guidance” amplifying the proposed regulations.  Last week, the Department added another layer of complexity when it issued an Administrator’s Interpretation of the Fair Labor Standards Act.  (Covington’s Employment group analyzed the Interpretation here.)  The fifteen-page Interpretation stems from the Department’s conclusion that companies are increasingly misclassifying employees as independent contractors.  It explains the Department’s view that the statutory definition of employ (“to suffer or permit to work”) informs the distinction between those classes of workers.  We hate to spoil an ending, but the bottom line is clear:  “most workers are employees.”

The Interpretation applies across a broad range of industries, but it presents special issues for government contractors.  Federal contracts in excess of $500,000 trigger obligations under the Paycheck Transparency provisions (section 5) of the Executive Order.  The proposed regulations require employers with covered contracts to provide each worker whom they classify as an independent contractor with “a document … informing the individual of that status.”  Contractors must look elsewhere for guidance on format and content of the document.


Continue Reading Labor Department’s Interpretation of the FLSA’s “Suffer or Permit” Standard Triggers More Compliance Burdens for Government Contractors

On May 28, 2015, the Federal Acquisition Regulatory (FAR) Council published proposed regulations that create additional obstacles for offerors seeking to obtain government contracts.  As we previously discussed, these regulations implement the “Fair Pay and Safe Workplaces” Executive Order 13673 that President Obama signed on July 31, 2014.  The regulations, which were accompanied by and incorporate proposed implementing guidance published by the Department of Labor (DOL), would amend the FAR to require contractors to disclose certain labor law violations when submitting bids for federal work.  The purpose of the Executive Order and proposed regulations is to advance the longstanding principle that contractors must be responsible in order to conduct business with the federal government.  The government’s goal is to promote and maintain economy, efficiency, and integrity in the procurement process by only awarding contracts to contractors who comply with labor laws. 
Continue Reading Proposed “Fair Pay and Safe Workplaces” Regulations Clarify New Responsibilities for Government Contractors