Category Archives: Executive Order

Executive Order Requiring Paid Sick Leave Is On The Horizon

President Obama is said to have drafted an Executive Order, obtained by the New York Times, which would require federal contractors and subcontractors to provide their employees with a minimum of 56 hours (about 7 days) of paid sick leave annually to use for their own illness or to care for sick relatives.  The draft order would also allow the leave to be used for medical attention, counseling, and legal action relating to domestic violence and sexual assault.  The draft order specifies that the right to take paid leave cannot be contingent upon the employee finding a replacement during the leave.  Unpaid sick leave would carry over from year to year.  Compliance with the Executive Order would be a pre-requisite to obtaining a contract with the Government.

President Obama’s action comes after the Department of Labor (the “DOL”) released a statistic showing that 39% of the private sector work force currently has no paid sick leave.  The DOL is said to be reviewing the draft order, but has stated that no final decision has been made yet.  If the order is issued, the DOL secretary will issue detailed regulations by September 30, 2016.

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Filed under Department of Labor, Executive Order

OFCCP Provides List of Resources for Contractors Relating to LGBT Workers

The Office of Federal Contract Compliance Programs (“OFCCP”) recently published a list of resources to assist federal contractors in better understanding how to create an inclusive workplace for lesbian, gay, bisexual, or transgender (“LGBT”) employees.  These resources are intended to assist federal contractors in complying with Executive 13672 and OFCCP’s Final Rule published last December prohibiting federal contractors from discriminating on the basis of sexual orientation and gender identity.  OFCCP’s non-exhaustive list of resources includes various advocacy groups and civil rights organizations, such as The Human Rights Campaign and Lambda Legal Defense & Education Fund.  The list also includes a link to the Department of Justice’s (”DOJ’s”) memorandum announcing DOJ’s position that Title VII prohibits discrimination based on gender identity, including transgender status.

The resources OFCCP provides can be a useful starting point for contractors as they educate their workforce, particularly managers and recruiters, on the implications of these new protections. The Final Rule implementing Executive Order 13672 is set to go into effect on April 8, 2015.

 

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Filed under Executive Order, Office of Federal Contract Compliance Programs

OFCCP Releases Proposed Rule Prohibiting Adverse Action Against Employees and Applicants Discussing Pay

On September 15, 2014, the Office of Federal Contract Compliance Programs (“OFCCP”) released its Notice of Proposed Rulemaking (“Proposed Rule”) implementing President Obama’s Executive Order 13665 (“EO 13665”) banning contractors from taking adverse action against employees and applicants who discuss their pay.  When President Obama signed EO 13665 on April 8, 2014, he instructed OFCCP to issue a proposed rule prohibiting federal contractors from discharging or discriminating against employees or applicants who inquire about, discuss, or disclose their own compensation or compensation of other employees and applicants.  In a Fact Sheet on the Proposed Rule, OFCCP stated that the purpose of the Proposed Rule is to narrow the pay gap disadvantaging women and minorities by allowing them to discuss their pay and know if they are “being underpaid compared to [their] peers.”  OFCCP also believes the Proposed Rule would “reduc[e] pay discrimination and ensur[e] that qualified and productive employees receive fair compensation”, by enabling them to discuss their pay without fear of adverse action.

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Filed under Compensation, Department of Labor, Executive Order, OFCCP

Executive Order May Block Contractors with Labor Violations from Receiving Federal Contracts

On July 31, 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order (“Executive Order”) that requires contractors to (1) disclose recent violations of various workplace laws before being awarded federal contracts; (2) provide wage notifications to employees and notify independent contractors of their non-employee status; and (3) barring contractors from requiring employees to sign pre-dispute arbitration agreements. This is slated to take effect for new contractors in 2016.

Background on Executive Order

According to a Fact Sheet released with the Executive Order, the purpose of this executive action is to “crack down” on federal contractors by ensuring that companies with a history of employee rights violations do not receive federal contracts. The White House indicated that the “goal of the process created by the Executive Order is to help more contractors come into compliance with workplace protections, not to deny contracts to contractors.” The Obama Administration also believes that the Executive Order will “promote efficiency in federal contracting” by removing “companies with workplace violations” that are “more likely to encounter performance problems.”

The Executive Order comes on the heels of a series of presidential actions geared towards implementing the Obama Administration’s “Year of Action” agenda in light of the stalemate in Congress. As recent as two weeks ago, President Obama signed an executive order making it illegal for federal contractors to discriminate on the basis of sexual orientation or gender identity.

Covered Contracts

The Executive Order will apply to all federal contracts for goods and services, including construction contracts, where the estimated value of the contract exceeds $500,000. It also requires prime contractors to flow down this requirement to all subcontracts that are not for commercially available off-the-shelf items where the estimated value of the subcontract is over $500,000.

Requirements of Executive Order

Disclosure of Labor Law Violations

As part of the solicitation process for covered contracts, contractors will be required to disclose whether they have any violations of certain federal and state discrimination, wage and hour, leave, and safety laws in the three years prior to bidding on the solicitation. Specifically, the Executive Order requires contractors to disclose violations of the following labor laws:

  • The Fair Labor Standards Act (“FLSA”);
  • The Occupational Safety and Health Act;
  • The National Labor Relations Act;
  • The Davis-Bacon Act;
  • The Service Contract Act;
  • Executive Order 11246;
  • Section 503 of the Rehabilitation Act;
  • The Vietnam Era Veterans Readjustment Assistance Act;
  • The Family and Medical Leave Act;
  • Title VII of the Civil Rights Act;
  • Americans with Disabilities Act;
  • The Age Discrimination in Employment Act;
  • Executive Order 13658 (establishing minimum wages for contractors); and
  • Equivalent state laws, as defined by the Department of Labor guidance.

Violations of these laws includes “any administrative merits determination, arbitral award or decision, or civil judgment” rendered against the contractor in the three years prior to the solicitation.

As part of this disclosure, contractors will have an opportunity to disclose to the contracting officer any “steps taken to correct the violations” or “improve compliance” with these laws, including any agreements the contractor has entered with a federal or state enforcement agency. If the contractor is awarded a contract covered by the Executive Order, the contractor must provide updated disclosures to the contracting officer every six months for the duration of the contract.

Notification of Wages

Contractors will now be required to provide all individuals performing work on the contract a notification “concerning the individual’s hours worked, overtime hours, pay, and any additions made to or deductions made from pay.” This notification must be provided to employees in each pay period. Contractors will not have to include hours worked in the notification for employees who are exempt from the overtime requirements under FLSA or similar state laws if the contractor has previously informed the employee that they are exempt from overtime.

Independent Contractor Notification

The Executive Order requires contractors to provide written notification to individuals they are treating as independent contractors who perform work on contracts covered by the Executive Order. No details have been provided on what information must be included in this disclosure.

No Mandatory Arbitration Agreements

Contractors being awarded contracts with an estimated value of $1 million will no longer be able to require employees or independent contractors to enter pre-dispute arbitration agreements requiring them to arbitrate claims under Title VII of the Civil Rights Act or any tort related to or arising out of sexual assault or sexual harassment claims. This does not apply if:

  • The employee voluntarily consents to the arbitration agreement after a dispute has arisen between the employee and the contractor;
  • The contract is for commercial items or commercially off-the-shelf items;
  • The arbitration agreement was entered prior to the contractor bidding on a contract covered by the Executive Order.

Flow Downs to Subcontractors

Prime contracts must flow down:

  • The requirements to disclose labor law violations for any subcontract of $500,000 or more (except for contracts for commercially available off-the-shelf items)
  • The requirement to provide employees with wage notifications and independent contractors notification of their status in all subcontracts of $500,000 or more (except for contracts for commercially available off-the-shelf items); and
  • The requirement prohibiting certain pre-dispute arbitration agreements for subcontracts with an estimated value exceeding $1 million.

In addition, prime contractors must represent to the contracting officer that:

  • The prime contractor will require each subcontractor to disclose labor law violations to it and update this information every six months; and
  • Before awarding the subcontract, the prime contractor will consider the disclosures submitted to it by the subcontractor to determine whether the subcontractor is “a responsible source that has a satisfactory record of integrity and business ethics”.

If violations of labor laws are brought to the attention of the prime contractor, the prime contractor must consider whether “action is necessary”, including whether to award the subcontract or taking remedial measures if the subcontract is already awarded.

Determination of Violations

Before awarding contracts of $500,000 or more, contracting officers are required to consider these disclosures to determine whether the contractor “is a responsible source that has a satisfactory record of integrity and business ethics.” The Executive Order has instructed the FAR Council, in consultation with the Department of Labor and other agencies, to issue regulations that provide guidance on what labor law violations “demonstrate a lack of integrity or business ethics” because they are “serious, repeated, willful, or pervasive violations.”

Although contractors will have to wait until the final regulations are issued to understand what types of labor law violations the government may block them from receiving contracts, the Executive Order provides the following guidance:

  • A “single violation of law may not necessarily give rise to a determination of lack of responsibility”, but it will depend on the “nature” of the violation.
  • To the extent existing standards under those labor laws do not provide guidance on the types of violations that are considered “serious, repeated, willful, or pervasive violations”, the government will use the following standards:
    • Violations are “serious” based on, among other considerations: (1) the number of employees affected; (2) the degree of risk posed or actual harm done by the violation to the well-being of the worker; (3) the amount of damages incurred or fines or penalties assessed for the violation;
    • Violations are “repeated” if the contractor has “had one or more additional violations of the same or a substantially similar requirement in the past three years”;
    • Violations are “willful” if the contractor “knew of, showed reckless disregard for, or acted with plain indifference” to whether it was in compliance with these labor laws; and
    • Violations will be considered “pervasive” by comparing the “number of violations” of these labor laws in relation to the size of the contractor.

Contracting officers must give consideration to “any remedial measures or mitigating factors”, such as any corrective actions taken by the contractor. The Executive Order also instructs contracting officers to send information to the “agency suspending or debarring official” as appropriate for serious violations.

Website

The federal government will be developing a website for contractors to report information required by the Executive Order as well as other federal contractor reporting requirements.

Effective Date

The Executive Order will be implemented on all covered contracts in stages on a “prioritized basis” starting in 2016.

 

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Filed under Department of Labor, Executive Order, OFCCP

OFCCP Sanctions Contractor for Pre-Employment Test that Adversely Impacted Minorities

On July 19, 2012, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a press release announcing it entered a consent decree with Leprino Foods, Inc. (“Leprino”) relating to use of a pre-employment test that it determined had an adverse impact on minority job-applicants at the company’s Lemoore West facility. The positions for which Leprino was using the test were entry-level, on-call labor positions called WorkKeys. The OFCCP found that the test, which examined applicants’ abilities in mathematics and in locating information, was not job-related because these skills were not critical to the applicants’ job duties, which included inspecting products, monitoring equipment and maintaining sanitation at the facility. In the press release, Director Patricia Shiu warned that contractors “cannot create artificial barriers to employment that unfairly block any individual from competing for good jobs.”

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Filed under Department of Labor, Discrimination, Executive Order, OFCCP, Uncategorized

OFCCP Posts New FAQ Concerning Retention of Resumes Received at Career Fairs

The Office of Federal Contract Compliance Programs (“OFCCP”) recently posted a new FAQ on their website to provide guidance to contractors on their obligation under the Internet Applicant Rule to retain resumes received for jobseekers at career fairs.   Many contractors have wondered whether they would be responsible for retaining such resumes even if they have a policy requiring candidates to apply online.  The OFCCP answered this question by stating that:

The contractor needs to retain resumes only if it considers resumes received at the job fair for a particular position.  The contractor need not retain any resumes if its consistently applied practice is not to consider paper resumes received at a career or job fair.  For example, the contractor would not need to retain paper resumes offered at a job fair if it does not consider them and instructs all job seekers to post their resumes on the contractor’s web site and/or apply for particular positions on the web site.  The contractor should take care to apply such a protocol in a uniform and consistent fashion.  It is the contractor’s actual practice that determines whether the contractor has considered a resume.  For example, if a contractor’s policy is to accept resumes only through its website, but its actual practice is to consider resumes received at a career or job fair as well, the contractor will be expected to retain both the resumes collected at job fairs as well as those submitted through the contractor’s website.

As a result, contractors who have a policy of requiring candidates to apply online should ensure that they consistently steer all jobseekers at career fairs to apply online and do not accept any resumes from candidates in person.  This will avoid the situation where a jobseeker’s credentials are considered by the contractor at the career fair, triggering the Internet Applicant data collection and recordkeeping requirement.

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Filed under Department of Labor, Executive Order, OFCCP

OFCCP Files Suit Against Cargill Seeking to Cancel Its Federal Contracts and Debar It From Bidding on Future Solicitations

On November 29, 2011, the Office of Federal Contract Compliance Programs (“OFCCP”) filed an administrative complaint with the Office of Administrative Law Judges (“OALJ”) against Cargill Meat Solutions Corporation (“Cargill”) seeking to rescind over $550 million in contracts held by the Company.  According to a press release issued by OFCCP, Cargill allegedly discriminated against 4,069 qualified female and minority applicants for entry-level production jobs at its Springdale, Arkansas establishment.  OFCCP filed the complaint after it was unable to secure a Conciliation Agreement with Cargill.

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Filed under Affirmative Action Plan (AAP), Department of Labor, Discrimination, EEO, Executive Order, OFCCP, Veterans