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Agencies set October target for federal contractor ‘blacklisting’ rule

To ensure federal contractors better comply with laws that protect their workers’ safety, wages and civil rights, the U.S. Department of Labor and Federal Acquisition Regulatory (FAR) Council have issued final regulations and guidance implementing the Fair Pay and Safe Workplaces Executive Order, a contentious measure top construction officials dub the “blacklisting rule.” Phased implementation begins this month and continues through October 2017.

Signed by President Obama in July 2014, the order requires prospective federal contractors to disclose labor law violations and gives agencies more guidance on how to consider such actions when awarding federal contracts. It directs the Labor Department and Council to issue regulations and guidance to implement the new requirements.

“Federal contracts should deliver value for taxpayers in a way that is consistent with our nation’s values,” contends Labor Secretary Thomas Perez. “Contractors that illegally cut corners at the expense of their workers should not benefit from taxpayer-funded federal contracts. At the same time, employers who meet their legal responsibilities should not have to compete with those who do not. The regulations and guidance seek to ensure a level playing field for contractors and workers alike.”

Contractors are already required to disclose findings of fault and liability made in administrative or civil proceedings. The Labor Department argues, however, “Current disclosures do not give a full picture of the contractor’s labor compliance track record and leave agencies vulnerable to making awards to contractors that cheat their workers, competitors and the taxpayers.”

With the new rule phased in fully, prospective contractors will be required to disclose violations of 14 basic workplace protections from the previous three years, including those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections. In addition to setting up a process to effectively consider labor law violations, the White House order requires that contractors’ employees are given the necessary information each pay period to verify paycheck accuracy. It also ensures that workers who may have been sexually assaulted or had their civil rights violated get their day in court, putting an end to mandatory pre-dispute arbitration agreements covering these claims at large federal contractors.

To help contractors come into compliance with labor laws, the regulations and guidance build on the existing procurement system. Most federal contractors will only have to attest that they comply with laws providing basic workplace protections. Designated Agency Labor Compliance Advisors will be available to help contractors who report violations and coordinate with the relevant enforcement agency experts to help bring them into compliance. The final regulations are effective October 25, 2016, and implemented in phases over the next 12 months to give contractors time to understand their responsibilities.

The Labor Department has begun a pre-assessment process for contractors that anticipate competing for future federal contracts. Agency staff are available to discuss existing labor law violations and whether additional compliance measures are warranted. Pre-assessment process details can be obtained at www.dol.gov/asp/fairpayandsafeworkplaces.