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Legislative Update

Gov't Affairs News

NECA Top Three 8/26/16

Aug 26, 2016

1. The U.S. Department of Labor and the Federal Acquisition Regulatory Council on August 24 announced final regulations and guidance implementing the Fair Pay and Safe Workplaces Executive Order (EO).

Signed by President Obama in July 2014, the order requires contractors seeking federal contracts worth $500,000 or more to disclose any violations they committed, during the previous three years, of 14 Federal labor laws and Executive Orders, as well as equivalent State laws. This includes any violations addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections. The rule gives Federal agencies guidance on how to consider labor violations when awarding federal contracts. This final rule and guidance implement the EO. Unlike the proposed rule, the final rule phases in the requirements starting in October 2016.

NECA's Look Ahead: Although NECA still has serious concerns about the overall intent of the EO, the final rule accepted a suggestion by NECA to allow subcontractors to report any qualifying labor law violations to the Department of Labor directly, instead of reporting to prime contractors, as proposed initially.

The guidance also creates a process for agencies and the department to help contractors come into compliance with labor laws. In crafting the final regulations and guidance, department and council received and considered thousands of comments from members of the public, including many in the contracting community.

NECA has been concerned about the EO and accompanying regulations because Federal contractors are already required to disclose findings of fault and liability made in administrative or civil proceedings. That said, the new rule requires additional information by requiring contractors to disclose if they have any violations of 14 Federal labor laws and Executive orders and equivalent State laws. The rule instructs contracting officers to review a contractor’s Labor Law violations to assess the contractor’s record of Labor Law compliance during the preaward “responsibility” determination and when making post-award decisions such as whether to exercise contract options. The EO also creates a new position of Federal bureaucrat - Agency Labor Compliance Advisors (ALCA) - to assist contracting officers. The ALCA’s are designed to help contractors who do report violations and coordinate with the relevant enforcement agency experts to assist them come into compliance.

In addition to setting up a process to effectively consider labor law violations, the EO requires that contractors' employees are given the necessary information each pay period to verify the accuracy of their paycheck. 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.

Phased-In Implementation Schedule

The final regulations will be effective on Oct. 25, 2016, and be implemented in phases to give contractors time to understand their responsibilities.

  • Week of September 12, 2016: The week of Sept. 12, 2016, the department will begin a pre-assessment process for contractors that anticipate competing for future federal contracts. Preassessment begins, through which current or prospective contractors may come to DOL for a voluntary assessment of their labor compliance history, in anticipation of bids on future contracts but independent of any specific acquisition. The department will be available to discuss existing labor law violations and whether additional compliance measures are warranted. For information about the pre-assessment process, visit: https://www.dol.gov/asp/fairpayandsafeworkplaces/PreAssessment.htm
  • October 25, 2016: The final rule takes effect. Mandatory disclosure and assessment of labor law compliance begins for all prime contractors under consideration for contracts with a total value greater than or equal to $50 million. The reporting disclosure period is initially limited to one (1) year and will gradually increase to three (3) years by October 25, 2018.
  • 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 threshold for prime contracts requiring disclosure and assessment of labor law compliance is reduced to $500,000.
  • October 25, 2017: Mandatory assessment begins for all subcontractors under consideration for subcontracts with a total value greater than or equal to $500,000.

Further information on the final guidance and regulations as well as implementation and compliance can be found at: https://www.dol.gov/asp/fairpayandsafeworkplaces/. 

2.  In addition to the new “Fair Pay” rules, there is still pending a final rule by an Executive Order requiring Federal contractors to provide Paid Sick Leave to their employees, even if they are covered by a collective bargaining agreement. This forthcoming rule, combined with the “Fair Pay” rule, is sure to add new headaches to electrical contractors who do federal work. In addition to imposing administrative burdens, both rules have significant implications for union employers.

NECA's Look Ahead: The 2016 NECA Convention is a great opportunity to learn everything you need to know to navigate how these rules can affect your business. Be sure to register today for the Federal Rules: Paid Sick Leave and Fair Pay and Safe Workplaces pre-convention workshop.       

3. The Alliance for Industrial Efficiency organized a coalition letter in support of the “HEAT Act” provisions contained in section 2312 of the Energy Policy Modernization Act (S. 2012). After obtaining 95 signatures from businesses, labor, clean energy, and environmental organizations, the Alliance has submitted the letter to leaders of the House and Senate energy and natural resources committees and provided copies to all the members of the conference committee.

From Fortune 500 companies to labor organizations and small startups, all of the signatories are committed to encouraging the use of combined heat and power (CHP) and waste heat to power (WHP) to enhance U.S. manufacturing competitiveness, increase energy efficiency, and improve the environment.

NECA’s Look Ahead: By addressing the challenges facing CHP and WHP, Section 2312 will help strengthen local economies and support national energy policy goals. We are hopeful that this important provision will be included in the conference report of the Energy Bill.