Yesterday, the FAR Council and the Department of Labor issued final regulations and final guidance implementing Executive Order 13673 – Fair Pay and Safe Workplaces. The interlocking final regulations and final guidance, with an effective date of October 25, 2016, impose new requirements on federal contractors and subcontractors, including:

◾Contractors, when bidding on new federal contracts valued at more than $500,000, will be required to disclose a three year look-back of all “labor law violations” (involving defined administrative merits determinations, civil judgments, and arbitral awards) arising under 14 different federal statutes and comparable state laws to the contracting officer. The contracting officer, with the assistance of a newly created Agency Labor Compliance Advisors, will review the labor law violations, determine whether the violations are serious, repeated, willful, or pervasive, and based on those determinations, decide whether the contractor is “responsible” enough to be awarded a federal contract.

◾Subcontractors, with subcontracts worth more than $500,000, will be required to make similar three year look-back disclosures of labor law violations to the U.S. Department of Labor for that federal agency to make a determination as to whether the subcontractor’s history of labor law violations are serious, repeated, willful, or pervasive. The prime contractor is then required to making its own decision as to whether its subcontractors are “responsible” based on the Department of Labor’s determinations.

◾Contractors and subcontractors with serious, repeated, willful, or pervasive labor law violations may be required to enter into labor compliance agreements – either before or after contract award – with designated federal agencies to mitigate or remediate histories of non-compliance as a condition to being deemed “responsible” to receive a federal contract or subcontract.

There are also new requirements concerning (1) Paycheck Transparency (what information must be listed on an employee’s or independent contractor’s paycheck); and (2) prohibitions on the use of arbitration to resolve employee claims unless the employee and contractor agree to use arbitration after the employee has a claim (effectively negating many pre-employment or company-wide arbitration agreements and plans).

The regulatory requirements outlined above have varied phase in periods, beginning October 25, 2016 through October 25, 2017. The final regulations and guidance will be published in today’s Federal Register.