In each new administration, there is a shift in focus and coverage. Over the last three years under the Biden administration, there has been a wide range of new and returning regulatory priorities and refinements to existing ones. The following is a short list of some of the issues ESL has recently discussed, helping our clients navigate this continually changing seascape:
- Davis Bacon and Related Acts (DBRA). For the first time in 40 years, the Department of Labor (DOL) updated its DBRA regulations at 29 C.F.R. Parts 1, 3, and 5. These regulations apply to prevailing wage requirements for federal construction projects and dozens of other federally funded projects involving construction under a variety of laws administered by other federal agencies. The new regulations, which became effective in October 2023, significantly change how prevailing wages are calculated, attempt to expand DBRA coverage through revised regulatory definitions, and equip DOL with a variety of new enforcement tools.
- Federal Contractor Minimum Wage. On April 27, 2021, the Biden administration issued Executive Order 14026, Increasing the Minimum Wage for Federal Contractors, setting a new and higher minimum wage for federal contractor and subcontractor employees working “on or in connection with” a federal contract, functionally supplanting the prior Executive Order 13658 that the Obama administration issued. The 2024 federal contractor minimum wage is $17.20 per hour for all federal contracts subject to the Davis Bacon Act, the Service Contract Act, concessionaire contracts, and contracts in connection with federal lands or services to federal employees. Rather confusingly, the FAR Council codified its contract clause implementing the Executive Order 14026 federal contractor minimum wage at FAR 52.222-55, Minimum Wages for Contractor Workers Under Executive Order 14026, using the same FAR clause number as the clause required under the prior Obama Executive Order.
- Nondisplacement of Qualified Workers Under Service Contracts. The Biden administration essentially reinstituted the prior regulations that the Trump administration had rescinded. Executive Order 14055, Nondisplacement of Qualified Workers Under Service Contracts, and the resulting 29 C.F.R. Part 9 (which became effective February 12, 2024) require successor service contractors to offer employment to the predecessor contractor’s workforce, enabling the incumbent workers to continue performing work on the successor federal contract and allowing the government to avoid the burdens associated with training up a new workforce. Predecessor contractors are required to prepare and submit a list of their Service Contract Act–covered employees to the contracting officer at least 30 days prior to contract termination. The contracting officer then provides a copy of that list to the successor contractor, who then is required to make bona fide job offers to the predecessor’s service employees who worked on the prior contract. There is a presumption that the regulations apply to all contracts subject to the Service Contract Act and that federal agencies must prepare and publish detailed analyses justifying any deviation or exception from the regulations. Also, the DOL regulations create a strong preference that the successor contract will be performed in the same locality or localities as the predecessor contract. The FAR Council has not yet issued a new contract clause implementing Executive Order 14055.
- Project Labor Agreements. In response to Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects, which the Biden administration issued in February 2022, the FAR Council adopted new project labor agreement FAR clauses, effective January 2024, at FAR 52.222-33, Notice of Requirement for Project Labor Agreement, and FAR 52.222-34, Project Labor Agreement. The new FAR clauses create a presumption that project labor agreements will apply to all federal construction projects over $35 million.
- Pay Transparency. In January 2024, the FAR Council issued a Notice of Proposed Rulemaking to implement the pay transparency requirements of Executive Order 14069, Advancing Economy, Efficiency, and Effectiveness in Federal Contracting by Promoting Pay Equity and Transparency The proposed rule (1) prohibits contractors from seeking or considering a job applicant’s compensation history when making employment decisions and (2) requires contractors to disclose the compensation to be offered to hired job applicants (typically a salary range) in all advertisements for job openings involving work on or in connection with a federal contract.
Rounding out ESL’s discussion and analysis of the latest regulatory developments, the Committee also routinely discusses court and administrative case law (such as DOL Administrative Review Board and Boards of Contract Appeals decisions) impacting FAR Part 22 issues, Office of Federal Contracts Compliance Programs (OFCCP) enforcement initiatives, and how such decisions impact a contractor’s ongoing legal compliance.
In addition to discussing issues of employment and labor law unique to federal contractors, ESL also discusses the special impacts certain legislative and regulatory changes have on federal contractors, such as:
- Federal Trade Commission noncompete final rule,
- Department of Labor independent contractor rule, and
- Department of Labor Fair Labor Standards Act overtime/exemption rule.
Aside from being reactive to developments in the law, ESL is also proactive, inviting federal agency officials to speak at our meetings to discuss their enforcement priorities and to meet the members of the ESL Committee with whom the agency officials will most likely be interacting.
Finally, ESL is in the process of beginning a new book project for the ABA—a comprehensive treatise on FAR Part 22 employment and labor issues affecting federal contractors and subcontractors—which is currently expected to be completed in 2025. Many hands make light work, and we would love to have your help. Please contact me to volunteer.
Most government contracts practitioners are relatively unfamiliar with FAR Part 22 compliance requirements, and many in-house human resources personnel are not intimately familiar with federal contacting issues. ESL helps fill this critical knowledge gap by distilling and sharing compliance information among practitioners. This is particularly important as debarment and other severe contract penalties could apply to FAR Part 22 violations. No federal contractor or subcontractor wants to face possible debarment over FAR Part 22 employment-related issues when such draconian penalties for noncompliance can frequently be avoided through careful planning and diligence. Membership and participation in ESL are an easy and collegial step towards gaining essential compliance information, allowing members to interact with subject matter experts on labor and employment compliance for federal contractors. Rather than operating with blinders on, participating in ESL can help practitioners see the full field of vision. It is complicated, but ESL is here to help you through it.
