Two New FAR Changes Affecting Government Contractors and Subcontractors

The FAR Councils published two new regulations today, one concerning Fair Pay and Safe Workplaces and the other Paid Sick Leave for Federal Contractors. We previously reported on these topics at earlier stages of the rule making process. See Safe Workplaces and Paid Sick Leave.

Fair Pay and Safe Workplaces. A final rule was published back in August amending FAR to implement the President's Executive Order (EO) on Fair Pay and Safe Workplaces. The EO was ostensibly designed to promote contracting efficiency by improving compliance with basic labor standards during the performance of federal contracts. However, implementation of portions of the EO were preliminarily enjoined by an order of the Federal District Court so FAR had to be amended to comply with the Judge's injunction order.

Specifically, the Government is enjoined from implementing any portion of the FAR rule or Department of Labor Guidance relating to the new reporting and disclosure requirements regarding labor law violations. The new rule published today ensures that new solicitations do not include representations or clauses that the enjoined coverage would have required.

The portion of the EO dealing with paycheck transparency remains unchanged. That rule requires contractors and subcontractors to provide wage statements to workers, giving them information concerning their hours worked, overtime hours pay, and any additions to or deductions made from their pay.

Paid Sick Leave for Federal Contractors. This new interim rule becomes effective for solicitations issued after January 1, 2017 and will allow Government contractor employees to earn up to seven days (or more) of paid sick leave annually including paid sick leave for family care. This rule seems like a formality as it merely implements final regulations published by the Department of Labor back in September. The rules themselves are quite extensive but bottom-line, contractors and subcontractors must allow their workers to accrue one hour of sick leave for every hour worked (or 56 hours per year).

The interim regulation also contemplates that contractors will need to create a written sick leave policy regardless of the number of employees.