New White House Order Mandates Self-Reporting for Federal Contractors
On July 31, 2014, President Obama issued the latest in a line of executive orders impacting government contractors, in which category many ACCA members fall. The core of that order mandates certain disclosure requirements; remediation under government contracts; and potential sanctions for GCs and subcontractors who provide goods and services in excess of $500,000 and that as a result of either legal or administrative proceedings have been found to have violated either federal laws or their state equivalents. Although the order states that it is effective immediately, a fact sheet subsequently issued by the White House states that the order is expected to be implemented on new contracts starting in 2016.
While the specifics of these self-reporting requirements under the order entitled “Fair Pay and Safe Workplaces” have yet to be finalized, contractors can expect that their regulatory burden under government contractors will be widely increased. At a minimum, the contracting party must report “to the best of its knowledge and belief” that, within the previous three years, it has not been the subject to any adverse “administrative merits determination, arbitral award or decision or civil judgment” for violations of specified labor laws. These laws include the Fair Labors Standards Act; the Occupational Safety and Health Act of 1970; the Migrant and Seasonal Agricultural Protections Act; the National Labor Relations Act; the Davis-Bacon Act; the Service Contract Act; the Equal Opportunity Executive Order; the Family Medical Leave Act; Title VII of the Civil Rights Act of 1964; the Americans with Disabilities Act of 1990; the Age Discrimination Employment Act of 1967; and equivalent state laws as defined by guidance set forth by the Department of Labor.
The self-reporting requirements also continue after the contract is awarded, and contractors must file disclosures every six months during the contract’s duration. Importantly, it must include similar disclosures from any subcontractors to the contract.
Contractors are also 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 from pay.” The notification must be provided to employees in each pay period. Contractors will not be required to include hours worked in the notification for employees who are exempt from overtime under FLSA or similar state laws. [ACCA assumes that its contractor members are already doing this and are including these not so new requirements as a simple reminder.]
Finally, new under the Fair Pay and Safe Workplace order is a mandate for contracts with an estimated value of $1 million or more, that contractors and subs may no longer require employees or independent contractors to enter into pre-dispute arbitration agreements that cover claims under Title VII of the Civil Rights Act or any tort related to or arising out of sexual assault or sexual harassment. (There are some exceptions to this mandate and contractors should consult the order to determine what these are, including non-application for a contract for commercial items or commercially of-the-shelf items.)
The impact of all the requirements in the order is yet to be seen, but in terms of violations the order states that while a “single violation of law may not necessarily give rise to a determination of lack of responsibility,” the government will likely have the authority to block repeat offenders from receiving contracts.
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