Federal Fair Pay & Safe Workplace Regs Issued

The U. S. Department of Labor and the Federal Acquisition Regulation (FAR) Council published final Guidance and Regulations to implement Executive Order 13673, the “Fair Pay and Safe Workplaces” – aka “Blacklisting” or “Bad Actors” – executive order on August 25, 2016. Under these regulations, which are effective October 25, 2016, federal government contractors and subcontractors will be required to report regularly to the government on workplace law “violations” in connection with contract bids and during contract performance. “Violations” is defined to include agency determinations, arbitral awards and civil judgments. The government will use the violations data to determine whether to award future government contracts, cancel existing contractors and potentially demand remedial action to address a pattern of violations.

In addition to the labor violation reporting requirements, the final regulations contain pay transparency requirements and prohibitions on the use of pre-dispute arbitration agreements to resolve Title VII and related tort claims.

It is now critical that all government contractors and subcontractors understand which labor law violations must be reported and how these reporting requirements may impact strategy with respect to investigations, charges, complaints, private lawsuits and arbitration proceedings. For example, an NLRB charge is not reportable but a complaint issued by any Regional Director is reportable. In addition, understanding remediation strategies and agency compliance agreements will be key as agencies will be weighing reported violations against mitigating factors.

Details about the Fair Pay and Safe Workplaces Executive Order Regulations and Guidance

The Executive Orders’ (EO) stated purpose is to ensure government contracts are awarded to employers at which workers “have safe workplaces, receive the family leave they are entitled to, get paid the wages they have earned, and do not face unlawful workplace discrimination.” Historically, federal contracts are only awarded to “responsible contractors.” Until now, the Federal Acquisition Regulations defined a responsible contractor as one having the means to successfully perform the contract and a satisfactory record of integrity and business ethics. The regulations now add an employer’s workplace law compliance record history as a criterion to determine whether an employer is “responsible.”

The EO and today’s regulations and guidance set forth procedures for federal agency contracting officers to consider an employer’s record of workplace law compliance when awarding contracts and subcontracts valued at more than $500,000. The workplace laws on which employers will need to report are:

  • Fair Labor Standards Act
  • Occupational Safety and Health Act (and state law equivalents)
  • National Labor Relations Act
  • Family and Medical Leave Act
  • Davis-Bacon Act
  • Service Contract Act
  • Migrant and Seasonal Agricultural Worker Protection Act
  • Title VII of the Civil Rights Act
  • Americans with Disabilities Act
  • Age Discrimination in Employment Act
  • Executive Order 11246 (affirmative action and equal employment opportunity)
  • Vietnam Era Veterans’ Readjustment Assistance Act
  • Section 503 of the Rehabilitation Act
  • Executive Order 13658 (federal contractor minimum wage)

The guidance and regulations require:

  • Regular reporting beginning October 25, 2016 by contractors of workplace law violations received within the first year preceding the start of a contract bids (which will be phased in to a three year look back period by October 25, 2018) , and updated disclosures every six months thereafter for the duration of the contract,
  • Subcontractor reporting beginning October 25, 2017 with reports made directly to DOL and reporting back to prime contractor on results of disclosures
  • An assessment by contracting officers and designated “Labor Compliance Advisors” of the disclosures to determine whether the contractor has engaged in “serious, willful, repeated, and/or pervasive violations”,
  • Based on that assessment, potential denial of new contracts, cancellation of existing contracts or demand for remedial action to address the violations, and,
  • A prohibition on mandatory pre-dispute arbitration agreements to resolve Title VII and related tort claims (for contracts $1,000,000 or more).
  • Pay transparency (hours worked, overtime hours (for non-exempt employees) by workweek and totaled for pay period, pay, deductions, identifying exempt employees and independent contractors);

The final regulations raise significant concerns for contractors, including:

  • The administrative burden associated with collecting, reviewing, synthesizing and reporting on this information,
  • A potential lack of due process as result of agency contracting officers and Labor Compliance Advisors to review violation data provided by employers (which will include "interim" findings subject to appeal, review, and possible reversal) to award, and deny, new contracts, or cancel existing contracts),
  • The requirement to disclose arbitral decisions even if the proceedings were private or confidential, and
  • For contracts in excess of $1 million prohibition on mandatory pre-dispute arbitration agreements to resolve claims arising under Title VII, or any tort related to or arising out of sexual assault or harassment.

This article was provided by and presented here with the permission of the law firm Jackson Lewis P.C. For more information, visit: