Federal Contractors To Be Burdened With Additional Disclosure Requirements If Government Has Its Say

The U.S. Labor Department (DOL) and three federal agencies (the Department of Defense, the General Services Administration and NASA) recently issued two proposed documents relating to the implementation of Executive Order 13673, better known as the Fair Pay and Safe Workplaces Executive Order. If enacted, these proposals would be problematic and burdensome for federal contractors; those who wish to have their voices heard on the matter have a July 27, 2015 deadline to submit comments on both documents.

The three contracting agencies issued a proposed rule amending the Federal Acquisition Regulations (FAR) intending to ensure federal agencies contract with only those contractors that they find to be “responsible sources,” i.e. those with a satisfactory record of integrity and business ethics. Under the proposed rule, affected contractors and subcontractors will be required to:

1. disclose labor law violations within the past three years;
2. notify workers performing under the contract how their pay is being calculated each pay period;
3. notify independent contractors that they are being treated as such; and
4. refrain from entering into certain pre-dispute arbitration agreements with employees or independent contractors.

The document also outlines how contracting officers, in consultation with “agency labor compliance advisors” – new positions created by the Order – will determine whether a contractor is a “responsible source.” If not, the proposal provides rules on how they can become one (e.g., requiring certain remedial measures, including a compliance agreement) or whether the contractor will instead be referred for suspension and debarment.

Forced Public Disclosure Of Violations
Perhaps the most onerous and problematic of the proposed requirements is that federal contractors will be required to disclose labor law violations which have occurred within the past three years. The proposed disclosure requirements are dense and complex; the following Frequently Asked Questions will help sort through the most common concerns raised by this portion of the proposed Rule.

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