This special edition of the Fastest 5 Minutes podcast covers recent developments related to the Infrastructure Bill and Inflation Reduction Act, and key areas to watch in 2023. The podcast features a cross practice team of Crowell partners, so we offer perspectives from tax, energy, labor and employment, government contracts, ESG, environmental, and government affairs.
This week, the Department of Labor (DOL) and Office of Management and Budget (OMB) issued a memo directing all agencies to designate “agency labor advisers” who are responsible for advising agencies on “Federal contract labor matters.” FAR Part 22 contemplates the appointment of “agency labor advisors,” and requires contractors to contact them about potential labor
As outlined in our prior client alert, the Office of Federal Contract Compliance Programs (the “OFCCP”) published a Notice in the Federal Register to federal contractors of a Freedom of Information Act (“FOIA”) request for disclosure of Type 2 Consolidated EEO-1 Report data submitted by all federal contractors and first-tier subcontractors from 2016 until
Responding to significant uproar from the federal contracting community, on August 18, 2022, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a revised version of its Directive 2022-01 – Advancing Pay Equity Through Compensation Analysis, which was originally issued on March 15, 2022. The Revised Directive is, per the OFCCP, intended to clarify its earlier guidance addressing federal contractors’ regulatory obligation to evaluate “compensation systems” as part of their affirmative action programming, and the documentation the OFCCP expects contractors to provide to the OFCCP regarding their analyses. Most importantly, the Revised Directive steps back from the position the Agency took in the March 15 Directive with regard to the applicability of the attorney-client privilege to analyses contractors are required to undertake pursuant to the Agency’s regulations. The Agency had previously taken the position that contractors conduct undefined “pay equity” analyses pursuant to the Agency’s regulatory obligation and, as a result, could not assert attorney-client privilege over such analyses.
On August 18, 2022, the FAR Council issued a proposed amendment to the FAR implementing Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects, which requires the use of project labor agreements (PLAs) on any large-scale federal construction projects valued at or above $35 million unless an exception applies. The Order, and the proposed rule, also give agencies discretion to use PLAs on projects under that $35 million threshold.
In addition to expanding definitions of “construction,” “labor organization,” and “large-scale construction project” to align with E.O. 14063, the proposed rule would revise FAR 22.503 to reflect the change in policy that mandates agencies to require the use of PLAs when awarding large-scale federal construction contracts—including individual orders under Indefinite Delivery, Indefinite Quantity contracts—unless an exception applies. The proposed rule would make the PLA requirement a mandatory flow-down. The proposed rule would also allow agencies to include any additional agency-specific requirements in a PLA through FAR 22.504(b)(6), and would strike the current FAR 22.504(c), which grants agencies discretion to specify PLA terms and conditions.
The Department of Labor (“DOL”) recently announced in a July 29, 2022 Change Order notice that the Wage and Hour Division (“WHD”) had revised the Field Operations Handbook (“FOH”) by deleting the exemption under the Service Contract Act (“SCA”) for federal contracts to operate Job Corps Centers. Prime contractors and subcontractors operating these centers will now be subject to the SCA and FAR 52.222-41, Service Contract Labor Standards, according to DOL.
The practical effect of this change is that covered contractors must pay the minimum wages and “bona fide” fringe benefits mandated by the SCA to all covered workers, which includes workers who are “non-exempt” under the Fair Labor Standards Act. The required wages and fringe benefits for these workers are set forth in wage determinations that are incorporated into the applicable contract by the contracting agency. Higher tier contractors must also flow down the SCA Clause (FAR 52.222-41) and all applicable wage determinations to lower tier contractors. All covered contractors must meet the SCA’s posting and recordkeeping requirements. See 29 CFR 4.183, Employees must be notified of compensation required; 29 CFR 4.184, Posting of notice; 29 CFR 4.185, Recordkeeping requirements.
On February 4, 2022, President Biden signed an Executive Order on Use of Project Labor Agreements for Federal Construction Projects (the “Order”) for federal construction projects valued at $35 million or more. The Order instructs federal agencies to require “every contractor or subcontractor engaged in construction” on projects valued at $35 million or more to “agree, for that project, to negotiate or become a party to” a Project Labor Agreement (“PLA”) with “one or more appropriate labor organizations.”
Federal agencies are authorized to grant exceptions to this PLA requirement under certain defined circumstances. The Order supersedes an executive order issued by then-President Obama in 2009, which had encouraged, but not mandated, the use of PLAs on construction projects valued at more than $25 million. The Order is characterized as a measure that will “promote economy and efficiency in Federal procurement” and advance “small business interests” and represents a noteworthy shift in United States federal labor policy, underscoring President Biden’s commitment to fulfilling his campaign promise to be the most labor-friendly President in history.
The Order applies to all “large-scale construction projects,” defined as a “Federal construction project within the United States for which the total estimated cost of the construction contract to the federal government is $35 million or more.” The Federal Acquisition Regulatory Council (“FAR Council”), in consultation with the President’s Council of Economic Advisers, may adjust this threshold based on inflation. “Construction” is defined to mean “construction, reconstruction, rehabilitation, modernization, alteration, conversion, extension, repair, or improvement of buildings, structures, highways, or other real property.” It appears that the Order does not apply to federally funded projects under the control of state and/or local governments.
On November 4, 2021, the Occupational Safety and Health Administration (“OSHA”) released its much-anticipated COVID-19 Vaccination and Testing Emergency Temporary Standard (“ETS”) requiring employers with 100 or more employees to ensure that their employees are either vaccinated by January 4, 2022, or submit to weekly testing. According to OSHA, employees who are unvaccinated face a “grave danger” from COVID-19, including the more contagious Delta variant. The ETS notes that COVID-19 is highly transmissible—particularly in workplaces where multiple people interact throughout the day often for extended periods of time—and exposure to COVID-19 can result in death or illness, with some individuals experiencing long-term health complications. OSHA has determined that vaccination is the most effective way to protect these employees.
The ETS will take effect immediately upon publication in the Federal Register, which is scheduled for November 5, 2021. The ETS will apply in those states where OSHA is responsible for regulating workplace safety and health. Per OSHA regulations, states that have their own OSHA-approved occupational safety and health plans will have 15 days to notify OSHA of the action they will take and 30 days to adopt the ETS or promulgate standards that OSHA considers at least as effective as its ETS.
The OSHA ETS is part of a sweeping policy of the Biden Administration to get more American workers vaccinated. In addition to this ETS, the Centers for Medicare & Medicaid Services (“CMS”) released today a Vaccination Interim Final Rule (“IFR”) requiring workers at healthcare facilities participating in Medicare or Medicaid to be fully vaccinated. Both the OSHA and CMS actions follow on the heels of Executive Order 14042 mandating that certain federal contractors and subcontractors require their covered employees to receive vaccinations against COVID-19, with limited exceptions for those who cannot be vaccinated for legally-protected reasons, and OSHA’s June 10, 2021 ETS directed toward protecting healthcare workers in particular from COVID-19. Our previous alert on OSHA’s June 10, 2021 ETS is available here, and our alerts regarding Executive Order 14042 are available here. OSHA excludes from coverage under the ETS those employers who are subject to the CMS rule or the Executive Order 14042 mandate.
Although the ETS is very detailed—490 pages in all—the key takeaways and deadlines for compliance are below.
Continue Reading OSHA Publishes Vaccine Requirements for Employers with 100 or More Employees
Following President Biden’s announcement of Executive Order 14042 (“EO”) on September 9, 2021, several agencies have issued guidance on the EO’s applicability to the contractor community, which we reported on here. Further to GSA’s September 30, 2021 Class Deviation CD-2021-13, on October 6, 2021, GSA reiterated that a mass modification program for all
On July 21, 2021, the Department of Labor (“DOL”) announced that it is seeking public comment on a proposed rule which would require federal contractors to pay a $15.00 per hour minimum wage by January 30, 2022. The rule would implement President Biden’s April 27, 2021 Executive Order 14026 (“EO 14026”), which mandated an increase