Court Injunction Blocks Federal Contractors’ Fair Pay and Workplace Protections

APPLIES TO

All Employers with a Federal Contract

EFFECTIVE

October 24, 2016

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The Fair Pay and Safe Workplaces Executive Order (the “Order”), originally slated to go into effect on October 25, 2016, has been blocked from implementation.  A Texas court granted a nationwide preliminary injunction, which immediately stops enforcement of the Order until the lawsuit presented by industry groups reaches its final resolution.  The Order contains three major components, two of which have been enjoined by the injunction:

  • [BLOCKED] Disclosure of Labor Violations: Under the Order, contractors submitting bids for contracts over $500,000 would be required to publicly disclose information about their labor violation history. The disclosures would be taken into account when determining who to award the contract to, and lack of compliance could result in a denial of proposed or cancellation of existing contracts.  Enforcement of this component of the Order has been halted until final determination of the lawsuit.
  • [BLOCKED] Arbitration of Title VII, sexual assault or harassment claims: The Order limits the ability of covered contractors to have employees sign arbitrations agreements.  This component applies to contracts valued over $1,000,000.  Covered contractors cannot require employees to arbitrate disputes regarding Title VII claims or tort claims arising from sexual assault or harassment.  This provision does not apply to employees covered by a collective bargaining agreement or to agreements entered before October 25, 2016, unless the agreement is modified or replaced.  Enforcement of this component of the Order has been halted until final determination of the lawsuit.
  • Paycheck Transparency: federal contractors and subcontractors of contracts valued over $500,000 will be required to provide wage statements to covered employees regarding their wage rate, hours worked, overtime hours, and any addition or deductions from wages. Exempt employees’ wage statements need not show hours worked; however, the contractor must inform the employee in writing of their exempt status prior to beginning work on the contract.  Independent contractor relationships must also be put on notice.  This component of the Order is not affected by the court’s action and goes into effect January 1, 2017.

ManagEase will continue to report on further developments in this area.

Action Items

  1. Look for more news from ManagEase regarding this developing area.
  2. Ensure that your payroll system is set up to issue detailed wage statements to all employees. containing the appropriate information, by January 1, 2017.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2016 ManagEase, Incorporated.

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