expanding obligations for federal contactorsmsshrm.shrm.org/files/federal contractor(1).pdf ·...

Expanding Obligations for Federal Contactors

By: Anne Harlan Latino and

Rusty Turner

Four New Executive Orders

• Economy in Government Contracting • Non Displacement of Qualified Workers

under Service Contracts • Notification of Employee Rights Under

Federal Labor Laws • Use of Project Labor Agreements

Economy in Government Contracting

• Costs of any activity to persuade employees not to unionize are now unallowable expenses

• Government contractors will not be reimbursed for any costs incurred to educate employees about unions

Economy in Government Contracting (cont.)

• When used to persuade employees to exercise or not to exercise their right to unionize, the following costs are unallowable: – Preparing and distributing materials – Hiring or consulting legal counsel or consultants – Holding meetings – Planning or conducting activities by managers,

supervisors, or union representatives

10 Things You Should Know About Unions

Economy in Government Contracting (cont.)

• The following costs are still allowable:

– Costs to maintain relations – Costs of shop stewards – Labor-management committees – Employee publications

Non Displacement of Qualified Workers under Service Contracts

• A successor contractor must offer to hire the previous contractor’s employees – “Successor” is defined as performing the

same or similar services at the same location – No openings until you offer previous

employees a right of first refusal – Must give them at least 10 days to accept

Non Displacement of Qualified Workers under Service Contracts (cont.)

• Applies to:

– SCA contracts – furnish services to the U.S. • Does not apply to:

– Contracts or subcontracts under $100,000 – Javits-Wagoner-O’Day contracts (supplies from blind

business) – Randolph-Sheppard Act contracts (blind vending

facilities) – Dual federal and non-federal service contracts


• “Same or similar services” = identical to or has characteristics that are alike in substance and essential to the contract

• At the same location • Must include contract clause language


• 10 days before end of contract, predecessor contractor must provide a certified list of all service employees.

• What if they don’t provide the list? – Still responsible for offering employment! – “Other credible evidence”

• Contracting Officer provides notice to employees on list

– “entitlement to job offer”


• Right of first refusal • No employment openings • “Employment opening” = vacancy in

position on contract • May keep and use current employees

– 3 month minimum employment • May use less employees than predecessor • For 90 days


• Must offer previous employee a job UNLESS: – Employee will be retained by previous contractor – Manager or supervisor – Not a service employee under the SCA – Not qualified for the job

• An employee is not qualified if the successor “reasonably believes” that the employee has failed to perform suitably on the job


• Unqualified / unsuitable employees • Presumption: all employees suitable • Contractor has burden to prove

unsuitability – “credible information” from “knowledgeable

source”


• Express offer of employment – Written or oral – In native language

• Job Offer – Does not have to be for same position – Can have different pay or benefits

• Record keeping: – Written offers of employment – Contemporaneous written record of oral offers – Roster of Meeting where offers extended – Names of employees to whom offers made


• Compliance

– Conciliation Investigation • No retaliation • Remedies:

– Offer employment, lost wages – Willful violation:

• Debarment

Notification of Employee Rights under Federal Labor Laws

• Federal contractors and subcontractors must now post a notice informing employees of their rights under Federal labor laws, including: – Right to form a union – Right to engage in union activities – Right to join a union

• Additional provision in contract

Notification of Employee Rights under Federal Labor Laws (cont.)

• This does NOT apply to: – Collective bargaining agreements – Government contracts under $100,000 – Subcontracts under $10,000 – The United States; Federal Reserve Bank; States – Labor organizations; officers and agents of labor

organizations – Agricultural laborers – Domestic servants – Anyone employed by his parent or spouse – Independent contractors – Supervisors – Railway Labor Act employees


• The poster’s introduction states: – The NLRA guarantees the right of employees to organize and

bargain collectively with their employers, and to engage in other protected concerted activity. Employees covered by the NLRA are protected from certain types of employer and union misconduct. This Notice gives you general information about your rights, and about the obligations of employers and unions under the NLRA. Contact the National Labor Relations Board, the Federal agency that investigates and resolves complaints under the NLRA, using the contact information supplied below, if you have any questions about specific rights that may apply in your particular workplace.


• The poster lists the following acts that Employees may engage in: – Organize a union to negotiate with your employer concerning your wages,

hours, and other terms and conditions of employment. – Form, join or assist a union. – Bargain collectively through a duly selected union for a contract with your

employer setting your wages, benefits, hours, and other working conditions.

– Discuss your terms and conditions of employment with your co-workers or a union.

– Take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with our employer or with a government agency, and seeking help from a union.

– Strike and picket, depending on the purpose or means of the strike or the picketing.

– Choose not to do any of these activities, including joining or remaining a member of a union.


• The poster identifies the following Employer actions as illegal: – Prohibit you from soliciting for the union during non-work time, such as

before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking lots or break rooms.

– Question you about your union support or activities in a manner that discourages your from engaging in that activity.

– Fire, demote, or transfer you, or reduce your hours or change your shift, or otherwise take adverse action against you, or threaten to take any of these actions, because you join or support a union, or because you engage in concerted activity for mutual aid and protection, or because you choose not to engage in any such activity.

– Threaten to close your workplace if workers choose a union to represent them.

– Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.

– Prohibit you from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.

– Spy on or videotape peaceful union activities and gatherings or pretend to do so.


• The poster identifies the following union actions as illegal: – Threaten you that you will lose your job unless you support the

union. – Refuse to process a grievance because you have criticized

union officials or because you are not a member of the union. – Use or maintain discriminatory standards or procedures in

making job referrals from a hiring hall. – Cause or attempt to cause an employer to discriminate against

you because of your union-related activity. – Take other adverse action against you based on whether you

have joined or support the union.


• Part of compliance evaluations • If a federal contractor fails to post the notice, it

can be sanctioned by: – Cancellation, termination, or suspension of any

contract, and – Debarment

• Retaliation provision – If a federal contractor “does not take all necessary

steps to ensure” that no one intimidates, threatens, or coerces another from participating in an investigation, its contract can be cancelled or it can be debarred.

Use of Project Labor Agreements

• It is the policy of the Obama administration to encourage the use of project labor agreements – Project labor agreement = agreements between

unions • Specifically revokes the Bush administration’s

policy of neutrality towards unions • Only applies to construction contracts which cost

$25 million or more

Use of Project Labor Agreements (cont.)

• May require PLA if: – (1) advance the Federal government’s interest

in achieving economy and efficiency, – (2) produce labor-management stability, and – (3) ensure compliance with laws and

regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters.


• Factors: – the project will require multiple construction contractors

and/or subcontractors employing workers in multiple crafts or trades;

– there is a shortage of skilled labor in the region in which the construction project will be sited;

– completion of the project will require an extended period of time;

– project labor agreements have been used on comparable projects undertaken by Federal, State, municipal, or private entities in the geographic area of the project;

– a project labor agreement will promote the agency’s long term program interests, such as facilitating the training of skilled workforce to meet the agency’s future construction needs; and

– any other factors that the agency decides are appropriate


• Provisions that must be included in the Project Labor Agreement: – Bind all contractors and subcontractors on the construction

project; – Allow all contractors and subcontractors to compete for contracts

and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements;

– Contain guarantees against strikes, lockouts, and similar job disruptions;

– Set forth effective, prompt, and mutually binding procedures for resolving labor disputes arising during the project labor agreement;

– Provide other mechanisms for labor-management cooperation on matters of mutual interest and concern, including productivity, quality of work, safety, and health; and

– Fully conform to all statutes, regulations, and executive orders.

OFCCP Compliance Evaluations

• Old = Active Case Management (ACM) • New = Active Case Enforcement (ACE)

Similarities Between ACM and ACE

• Contractors selected for

review through the Federal Contractor Selection System (FCSS)

• At least 24 months between reviews

Differences: New ACE • Full desk audit for

EVERYONE – Comprehensive analysis of

AAP • Impact ratio analysis • Compensation analysis • Reasonableness and

acceptability of AAP

• Every 25th = full compliance review – Onsite visit + offsite analysis

New ACE • Indicators of Discrimination =

– Statistics – Anecdotal evidence – Patterns of individual

discrimination – Patterns of systemic

discrimination – Patterns of technical violations – Non-compliance with other laws

Closing ACE • If not indicators of discrimination found,

– Case closed. • If indicators are found

– Onsite review – Document compliance with E.O. 13496 (NLRA

poster)

E-Verify for Federal Contractors

• Are you really covered by FAR? – Not all Federal contracts qualify – Is the FAR E-Verify clause in your contract

• 48 C.F.R. 52.222-54

What is it?

• No cost Internet based system • Match of I-9 form information with SSA, DHS

and DOS databases • Electronic Verification of Employment Eligibility

– Newly hired employees – Existing employees assigned to work on a qualifying

Federal contract • May also choose to E-Verify entire existing workforce

Covered Employees

Flow-down of FAR E-Verify

• Prime contract contains the FAR E-Verify clause

• The FAR E-Verify clause flows down to all tiers of subcontract

• Prime contractor is responsible for: – Ensuring FAR clause is included in all

qualifying subcontracts

Timeline Step 1

Step 2

Step 3

Step 4 (Optional)

I already have an I-9 Form….

Query Results

Yellow Light

Photo Matching

Questions???

Anne Harlan Latino Rusty Turner [email protected] [email protected] (601) 965-8190 (601) 965-8159

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