Regulatory Update

Regulations to Implement President Obama’s Executive Order on Fair Pay and Safe Workplaces Moving Forward

September 11, 2015

On August 25, 2015, SHRM and its strategic partner the Council for Global Immigration (CFGI), along with the College and University Professional Association for Human Resources (CUPA-HR), submitted comments to the Federal Acquisition Regulatory Council (FAR Council) and the Department of Labor (DOL) on regulations and guidance designed to implement the Executive Order on Fair Pay and Safe Workplaces initially published in the Federal Register on May 28, 2015.

The proposals impose multiple new obligations on government contractors. In general, the proposed rule requires that organizations bidding on federal contracts for goods and services worth more than $500,000 must, for the first time, disclose violations of 14 federal labor laws and their state law equivalents that occurred in the past three years. In addition, agencies must identify new labor compliance advisors who will assist contract officers in determining whether, based on the disclosed violations, contractors’ actions “rise to the level of a lack of integrity or business ethics.” In addition, contractors and subcontractors must provide updated disclosures of their violations every six months.

SHRM and CFGI raised concerns that the proposals do not discuss how contractor due process rights will be protected or how agencies will accomplish the review contemplated by the proposals without unduly delaying the contracting process. The proposals would enable federal agencies to reject a bid or cancel an existing contract—as well as initiate suspension and debarment proceedings—based on violations that a contractor may have already resolved or that have not been fully adjudicated. Concerns were also raised by the commentators that federal contractors may feel compelled to settle alleged labor law allegations, as opposed to defending against an allegation, for fear of having a reportable violation that could affect their eligibility for federal contracts. Finally, the cost of compliance may discourage smaller employers, which have more-limited resources, from choosing to compete for government contracts.


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