With a Presidential Memorandum halting all proposed federal regulations that have not yet taken effect and pausing the Department of Labor’s (DOL) appeal of the nationwide injunction on the overtime rule which would double the minimum salary for exempt status, we are curious how the new administration will impact employer responsibilities, particularly those of federal contractors. While we certainly hope for some respite, we won’t speculate on what might happen, and we continue to encourage employers to be diligent in compliance with those regulations which have recently taken effect as well as those that employers have been slow to tackle.
New Form I-9 Employment Eligibility Verification
As of January 22, 2017, employers are required to use the 11/14/2016 N version of the Form I9 . The new form can be found here: https://www.uscis.gov/i-9. If you have used the expired version after the January 22, 2017 effective date, you will need to complete a new form with the employee and attach the previously completed form as well as an explanation, including the date and signature of both employer and employee.
With President Trump’s efforts toward immigration reform, and promises to significantly increase the number of Immigration and Customs Enforcement (ICE) officers, I9 compliance and E-verify are areas where stricter compliance is expected from the Trump administration.
Executive Order (EO) 13673 Fair Pay and Safe Workplaces
Though the October 25, 2016 court order enjoined the implementation of “any portion of the FAR Rule or DOL Guidance relating to the new reporting and disclosure requirements regarding labor law violations as described in EO 13763”, it did not impact the Paycheck Transparency requirements.
The Paycheck Transparency requirements became effective January 1, 2017 and are to be included as FAR Clause 52.222-60 by contracting officers after that date. EO 13673 applies to all prime and subcontractors with contracts exceeding $500,000, with the exception of contracts for commercially available off the shelf items.
- Employers are required to provide a wage statement to all employees for which they are required to maintain wage records per the Fair Labor Standards Act (FLSA), Service Contract Act (SCA), Wage Rate Requirements (Construction) statute, formerly known as Davis Bacon Act (DBA), or equivalent state laws. The wage statement shall be issued each pay period and contain the following information:
- Total number of hours worked in pay period
- Number of overtime hours – broken out by the period in which overtime is calculated and paid
- Rate of pay
- Gross pay
- Itemized deductions with description and amount for each
NOTE: The EO has required DOL to determine which states have wage statements which are similar to those specified in the EO. Employers may meet the wage statement requirements of the EO by complying with one of these states’ requirements if they have employees working within one of these states. If so, they may adopt these requirements for all employees. DOL will maintain a list of Substantially Similar Wage Payment States on their website.
- Employers are not required to include hours worked on the wage statement of employees who are exempt from the overtime requirements of the FLSA if they provide them with a written document explaining they are exempt from overtime. The written document must be provided before work is done, or with the first wage statement under the contract. The notice should not indicate that the DOL or the courts agree with the employer’s determination of exempt status.
- Employers are required to provide a written notice to independent contractors of their status and should be separate from all other documents. This document must be provided at the time the relationship is established and/or prior to the independent contractor performing work on the contract (if an employee’s status changes to independent contractor while performing work on the contract, notification should be provided prior to additional work being performed as an independent contractor). This notice should not indicate or suggest that enforcement agencies or the courts agree with the employer’s determination of independent contractor status.
- If a significant number of employees are not fluent in English, the employer is required to provide the wage statement and other notices in the language(s) in which they are fluent.
If the employer typically communicates and provides information to employees electronically, it is acceptable to provide these notices in the same way, provided the employee is able to access the document “through a computer, device, system or network provided or made available by the Contractor”.
Executive Order 13706 Paid Sick Leave for Federal Contractors
Though just recently becoming effective January 1, 2017, this executive order has been discussed for quite some time, and you’re probably tired of hearing it so no need for great detail. We have seen some confusion over who it applies to, so here’s some clarification including a few highlights from DOL’s Questions and Answers which can be found here: https://www.dol.gov/whd/govcontracts/eo13706/faq.htm
- This EO is applicable to the following contracts and subcontracts:
- Procurement contracts for construction covered by DBA
- Concessions contracts, including those excluded from SCA
- Contracts in connection with Federal property or lands and related to offering services for Federal employees, their dependents or the general public
- Applies to any person engaged in performing work on, or in connection with, a contract, including exempt employees
- Excluded are employees who perform duties necessary to the performance of a contract but who are not directly engaged in performing specific work called for by the contract and who spend less than 20% of their hours worked in a particular workweek performing work in connection with said contract.
The continuously evolving state of these Executive Orders serves to remind government contractors that “if your gonna play the game, you gotta know (and keep up with) the rules”.