Final Rule Provides Phased-In Implementation Schedule

Federal agencies have issued a final rule and guidance requiring certain prospective federal contractors to (among other things) disclose labor law violations.

Background
On July 31, 2014, the Fair Pay and Safe Workplaces Executive Order was signed. The order requires prospective federal contractors to disclose their violations of certain workplace protection laws before receiving a contract award. The final rule and guidance implement the order.

Disclosure of Labor Violations
Before prospective contractors can receive a contract, they must disclose violations from the reporting period (the previous 3 years, once the rule is fully phased in) of certain basic workplace protections, including those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections.

Note: While the order also covers equivalent state laws, with the exception of occupational safety and health "State Plans" that have been formally approved, equivalent state laws will not be covered in the guidance and rule; they require a second rulemaking to implement.

Phased-In Implementation Schedule
The final rule will be effective on October 25, 2016. However, several of the requirements will not take immediate effect but will instead be phased in as follows:

• September 12, 2016: Preassessment begins, through which current or prospective contractors may get a voluntary assessment of their labor compliance history, independent of a specific government contract.
• October 25, 2016: The final rule takes effect. Mandatory disclosure of labor compliance history begins for all prime contractors under consideration for contracts with a total contract value greater than or equal to million.
  The general rule under the order is that contractors and subcontractors must disclose decisions regarding labor violations that were rendered against them within the 3-year period preceding the date of the disclosure. However, the reporting disclosure period is initially limited to 1 year and will gradually increase to 3 years by October 25, 2018.
• Note: The 3-year disclosure period will be phased in during the first years of implementing the order, so that no contractor or subcontractor need disclose any decisions regarding labor violations that were rendered against them before October 25, 2015.
  October 25, 2016: Companies with federal contracts that exceed $1 million are prohibited from requiring their workers to enter into pre-dispute arbitration agreements for disputes arising out of Title VII of the Civil Rights Act, or from torts related to sexual assault or harassment, except where valid contracts already exist and remain unmodified.
  January 1, 2017: The paycheck transparency clause takes effect, requiring contractors to provide wage statements and notice of any independent contractor relationship to their covered workers.
  April 25, 2017: The total contract value above which prime contractors must make disclosures is reduced; the requirements apply to solicitations estimated to exceed $500,000 (and resulting contracts).
  October 25, 2017: Mandatory disclosure begins for solicitations expected to result in most subcontracts valued at greater than $500,000.

Additional information, including FAQs and links to the final rule and guidance, is available from the U.S. Department of Labor.

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