CPAs and Advisors with Your Growth in Mind

Government Contractors

Fair Pay and Safe Workplaces Nullified

On March 6, the Senate passed Joint Resolution 37, repealing President Obama’s Fair Pay and Safe Workplaces (“FPSW”) executive order, Executive Order 13653. Subsequently on March 27, President Trump issued an executive order revoking Executive Order 13673, section 3 of Executive Order 13683 of December 11, 2014, and Executive Order 13738 of August 23, 2016.

The FPSW executive order was issued on July 31, 2014. Originally planned to take effect on October 25, 2016, the executive order required contractors and subcontractors to report certain labor law violations, to provide certain information to employees with their paychecks, and prohibited involuntary arbitration of disputes between the employer and employees. The Department of Labor (“DoL”) was to issue implementation guidance, which would be used by the FAR Councils to amend the Federal Acquisition Regulation (“FAR”) to be compliant with the executive order. The DoL guidance and the FAR amendments were both issued on August 25, 2016.

The FAR provisions relating to the executive order are found in Subpart 22.20 along with associated clauses and solicitation provisions in Part 52. A federal judge had previously blocked the labor law and involuntary arbitration provisions of the order in October 2016, stating that the order was an overreach of the Executive Branch. However, the paycheck transparency part of the order remained in effect. This court order prevented the FAR provisions on labor law violations and involuntary arbitration from taking effect. Separately, the paycheck transparency provisions discussed in FAR 22.2005 and FAR 52.222-60 were permitted to go forward and became effective January 1, 2017.

While the intentions of Executive Order 13653 may have been noble, many argued that the administrative burden added to Federal contractors, a pre-award certification and subsequent certifications every six months concerning labor law violations would be an unnecessary consequence. On February 1, 2017, a group of 19 associations authored a letter to Congress stating that:

Obama administration’s costly and flawed ‘blacklisting’ regulation circumvents congressional authority, harms the economy and efficiency of the federal acquisition system and disrupts fair and open competition in federal contracting. It also creates a duplicative and costly bureaucratic structure within DOL that undermines longstanding suspension and debarment procedures that already are part of the federal contracting process.

As a result of Joint Resolution 37 and subsequent repealing of the Fair Pay and Safe Workplaces order, agencies and contractors must deal with contracts that have been issued since January 1, 2017, that contains FAR 52.222-60. Further, although President Trump’s executive order directed agencies to take appropriate action to manage any regulations that had been issued pursuant to the executive orders revoked on March 27, 2017, until such action is taken, agencies will still be required to comply with FAR 22.2005. Agencies also need to include FAR 52.222-60 in covered contracts, unless an agency obtains a deviation from this requirement.

If you have any questions or concerns regarding Fair Play and Safe Workplaces, please do not hesitate to contact one of our experienced GovCon professionals for assistance.

Topics: , ,