Government Contract Reporting Requirements
Government contract reporting requirements have changed drastically in recent years.3 min read
Government contract reporting requirements have changed drastically in recent years. In 2017 the Congress Review Act which would repeal the "blacklisting" rule that was made to impose stricter reporting requirements of government contractors.
This Act was followed by an Executive Order that would nullify the Fair Pay and Safe Workplaces Executive Order that first initiated the rules.
The Executive Order 13673, ‘Fair Pay and Safe Workplaces, or “blacklisting” rule, required the strict disclosures of both contractors already with government contracts and prospective ones as well as their subcontractors. This required them to disclose violations of the following:
- Federal labor laws
- Administrative merit determinations
- Civil judgments
- Arbitral awards or decisions
The regulation also required that all contractors and subcontractors disclose all of their worker's information each pay period. This would in effect prohibit the contractor from having their workers sign arbitration agreements related to Title VII claims and violations.
While the final rule does not require that the subcontractor report any violations to the primary contractor, it does require them to report them directly to a government agency. Contractors and subcontractors must report any violations of the 14 federal laws listed below.
- Fair Labor Standards Act
- Occupational Safety and Health Act
- Family and Medical Leave Act
- National Labor Relations Act
- Davis-Bacon Act
- Title VII of the Civil Rights Act
- Americans with Disabilities Act
- Age Discrimination in Employment Act
- Executive Order 11246
- Vietnam Era Veterans' Readjustment Assistance Act
- Section 503 of the Rehabilitation Act (of 1973)
- Executive Order 13658 - federal minimum wage
- Service Contract Act
- Migrant and Seasonal Agricultural Worker Protection Act
Contractors are not required to report state-level violations except for those related to OSHA.
The final rule also requires what is referred to as "paycheck transparency" which means both contractors and subcontractors are required to:
- Provide detailed information from their worker's pay stubs including overtime, hours worked, and deductions.
- Provide written notice of all independent contractors and their classification as such.
- Provide written notice of employees that are exempt from receiving overtime pay.
Additionally, the final rule will prohibit subcontractors and contractors with contracts over $1 million from entering into arbitration agreements under Title VII for sexual assault or harassment. Though this rule does not apply if the workers are under a collective bargaining agreement. This also fails to apply if an arbitration agreement is already in place.
Schedule of Implementation
Prime contractors must meet certain reporting requirements before they are able to submit a bid that valued at $50 million or more as of the year 2016. While they started to only require to report one year of previous labor compliance, the obligations since have increased, and they are now required to report at least three years of labor compliance. A timeline of the reporting rules is as follows:
- October 2016 -Contractors with contracts over $1 million will no longer be allowed to have employees sign arbitration agreements for Title VII claims for sexual assault or harassment.
- January 2017 - Paycheck transparency is in effect.
- April 2017 - Contractors with contracts over $500,000 begin to adhere to reporting requirements.
Government contractors were allowed to participate in pre-screening starting in September of 2016. Those who participated in the pre-assessment where reviewed for labor law compliance and the severity of any infractions that may have occurred. The Department of Labor was responsible for their pre-assessments, and the Agency Labor Compliance Advisor may approve or deny a contractor based on these assessments.
Contractors and subcontractors should implement the reporting and disclosure requirements specified in the final rule to ensure compliance with it. This allows them to create a database where they can track, store, and manage information. Contractors are also advised to connect with their subcontractors to make sure they are aware of the new requirements and working towards compliance.
Contractors and subcontractors that enter into arbitration agreements with workers, will need to review these agreements to ensure that they are compliant with the final rule. Arbitration agreements for Title VII sexual harassment and assault claims are only allowed if employees signed them before the October 25, 2016 deadline date. After this date agreements are no longer valid.
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