Happy New Year, Federal Contractors

As Bing Crosby sang, “let’s start the New Year right” — with federal contractor compliance! All dad jokes aside, the New Year provides a good opportunity to pull out the old compliance checklist and ensure that you and your company can be confident that you begin 2023 in the good graces of the Office of Federal Contract Compliance Programs.

Are you even a federal contractor? Priority #1 should always be to ensure that your company is a covered federal contractor or subcontractor. Maintaining compliance with federal contractor standards can be expensive and is always a hassle. Be sure to check if your federal contracts or subcontracts remain in force. Moreover, ensure that any agreements that you have with the federal government or by which you receive federal money are covered contracts. While most federal contracts come with affirmative action and other contractor strings attached, some do not — such as health care agreements with Tricare or the Centers for Medicare and Medicaid Services or deposit guaranty agreements with the FDIC.

Do your affirmative action plans accurately reflect your organization? Affirmative action planning is generally done based upon an organization’s “establishments” with a separate written affirmative action plan for each establishment. Through headcount growth (or attrition), mergers or divestitures, an organization’s establishments can change year to year. With each affirmative action planning year, covered contractors should ensure that their plans appropriately match their establishments, as defined by OFCCP regulations and guidance.

Are you enrolled in and using E-Verify? Federal contractors with new, renewed, or extended federal contracts on or after September 8, 2009, are generally required to participate in the federal E-Verify system.

Are you paying the correct minimum wage? Many (but not all) federal contractors are required to pay a minimum wage higher than the standard federal minimum wage to workers performing work on or connected with covered contracts. This requirement is one of the more complex requirements, as it involves the interplay of two executive orders. First, covered contracts include procurement contracts for construction covered by the Davis-Bacon and Related Acts, service contracts covered by the Service Contract Act, concessions contracts, and contracts entered with the federal government in connection with federal property or lands and related to offering services for federal employees, their dependents or the general public. Second, if you have a covered contract, the timing of your last contract inception, amendment, or renewal governs which minimum wage applies. For contracts last entered into, amended, or renewed between January 1, 2015, and January 30, 2022, the Obama minimum wage of $12.15 per hour applies. For contracts last entered into, amended, or renewed after January 30, 2022, the Biden minimum wage of $16.20 applies. (For those of you with sticker shock, these minimum wage rates are subject to annual increases each January 1st.) Tipped employees have a separate minimum wage.

Do you inquire about applicants’ criminal background history? Many companies continue to ask all applicants to answer criminal history questions such as, “Have you been convicted of a felony in the last seven years?” and other similar questions. Federal law now prohibits federal contractors from inquiring about criminal history until after a contingent job offer has been extended. The law includes limited exceptions for positions related to law enforcement and national security duties, jobs requiring access to classified information, and roles required by law to reveal criminal history information before the conditional offer stage. Otherwise, you will need to scrub those questions from your application process.

Does your paid time off plan comply? For organizations with covered contracts beginning or renewing on or after January 1, 2017, federal regulations require the provision of up to seven days of paid sick leave annually, including for family care and absences resulting from domestic violence, sexual assault, and stalking. Existing PTO policies may cover this obligation, if they provide the same level of benefits as the contractor regulations. A close review of any PTO plan is necessary to ensure compliance with the technical details of this mandate.

Have you posted the appropriate notices? Depending upon the nature of your federal contracts or subcontracts, your organization may be required to post additional workplace notices, such as the Pay Transparency Nondiscrimination Provision, the Employee Rights on Government Contracts, or the Employee Rights under the National Labor Relations Act.

If you have questions concerning your company’s federal contactor status, please contact Michael W. Bowling or another member of the firm’s Labor & Employment Practice Group.

Printable version.


Associated People:

Michael W. Bowling

Practice Area:

Labor & Employment