Michael W. Bowling
Although the new year is already underway, now is the ideal time to pause and double-check federal contractor compliance. Ensuring your company is meeting all obligations mandated by the Office of Federal Contract Compliance Programs will save time and money in the long run.
Consider these seven areas:
Verify federal contractor status: First, verify that your company is, in fact, a covered federal contractor or subcontractor. Checking that federal contracts or subcontracts remain in force is always worth the effort, as maintaining compliance with federal contractor standards can be expensive and burdensome. While most federal contracts include affirmative action and other federally mandated stipulations, some do not. Know your status before proceeding.
Review your company’s affirmative action plans: Affirmative action planning is generally based upon an organization’s “establishments” with a separate written affirmative action plan for each establishment. Through hiring, attrition or other factors, an organization’s establishments can change. With each affirmative action planning year, covered contractors should verify that their plans match their disclosed establishments, as defined by OFCCP regulations and guidance.
Enroll in and use E-Verify: Federal contractors with new, renewed or extended federal contracts on or after Sept. 8, 2009, are generally required to participate in the federal E-Verify system.
Check your pay scale: Most, 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. 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, with covered contracts, the timing of the last contract inception, amendment or renewal governs which minimum wage applies. For contracts last entered into, amended, or renewed between Jan. 1, 2015, and Jan. 30, 2022, the Obama-era minimum wage of $12.15 per hour applies. For contracts last entered into, amended, or renewed on Jan. 31, 2022, or thereafter in 2023, the Biden-era minimum wage of $16.20 applies. Tipped employees have a separate minimum wage.
Be aware of requirements around criminal history: Federal law now prohibits federal contractors from inquiring about criminal history until after a contingent job offer has been extended. Limited exceptions exist 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.
Review your paid time off plan: For organizations with covered contracts beginning or renewing on or after Jan. 1, 2017, federal regulations require the provision of up to seven days of paid annual sick leave, including family care and absences resulting from domestic violence, sexual assault and stalking. Existing policies may already cover this obligation if they provide the same level of benefits as the contractor regulations.
Post required notices: Your organization may be required to post additional workplace notices, such as the Pay Transparency Nondiscrimination Provision Employee Rights under the National Labor Relations Act or other official notices.
Consult with your in-house legal counsel or a labor and employment attorney for specific questions about contractors for your company.
The foregoing should not be understood as, or considered a substitute for, legal advice. For specific inquiries, please contact Michael W. Bowling or another licensed attorney.
Michael W. Bowling is an attorney with Crowe & Dunlevy, crowedunlevy.com, and a member of the Labor & Employment Practice Group.