Final Rules Affecting Federal Contractors’ Fair Pay and Workplace Protections


 Varies; See Below


Varies; See Below


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Two Final Rules – one already in effect, and one forthcoming—will significantly impact federal contractors’ employment practices.  The Rules are designed to ensure that appropriate workplace protections are extended to workers of entities that contract with the federal government.  Failure to comply with these Rules could result in penalties, or being denied or blacklisted from contracts.

Discrimination on the Basis of Sex

Effective August 15, 2016, any business or organization that holds any federal contract, subcontract or federally assisted construction contract/subcontract over $10,000, or any combination of federal contracts or subcontract that together total over $10,000 in a 12-month period, are covered by updated anti-discrimination rules on the basis of sex.

Enforced by the Office of Federal Contract Compliance Programs (“OFCCP”), the Rule updates the previous sex discrimination guidelines to bring them into alignment with many provisions of Title VII of the Civil Rights Act of 1964.  The Rule identifies and addresses the following barriers in the workplace based on sex discrimination:

  • Requires accommodations for pregnancy, childbirth, and related medical conditions;
  • Requires fair pay practices, including equal fringe benefits for both sexes;
  • Provides employees the right to recover lost wages every time wages that resulted from discriminatory decisions were paid, not just when the discriminatory decision was made;
  • Prohibits sexual harassment;
  • Prohibits discrimination based on sex stereotypes or gender identity;
  • Requires contractors to allow workers to use facilities consistent with the gender with which they identify;
  • Requires equal access to job development opportunities (e.g., setting sex, height, or weight requirements for a job that are not bona fide occupational qualifications);
  • Prohibits discrimination or lack of accommodation based on gender stereotypes (e.g., denying flexible workplace arrangements to fathers on the assumption mothers are sole caregivers);

Note that the new provisions of the Rule do not apply where it could violate the Religious Freedom Restoration Act.

Given that many contractors are subject to Title VII of the Civil Rights Act of 1964, many of these provisions are already in place.  Nevertheless, contractors may wish to fully review the protections and requirements afforded by the Rule, and can do so by visiting the OFCCP’s dedicated webpage here.


Fair Pay and Safe Workplaces Executive Order

Effective October 25, 2016, federal contractors submitting bids for contracts valued over $500,000 are affected by the following provisions of the Rule:

Public Disclosures of Violations:

  • Contractors will be required to publicly disclose information about their labor violation history via the System for Award Management (“SAM”).  Disclosures will be a factor in determining if the contractor will be awarded the contract.  Lack of compliance can result in denial of contracts or cancellation of existing contracts.
  • Contractors will be able to address their efforts at remedying violations with a contracting officer; such information will be taken into account when determining if the prospective contractor is responsible.
  • Violations that must be reported cover a broad number of regulations, including the Fair Labor Standard Act, the Occupational Safety and Health Act, the Family and Medical Leave Act, among others.  A full list of applicable federal laws and executive orders can found on the U.S. Department of Labor’s (“DOL”) FAQ.

Paycheck Transparency:

  • Effective January 1, 2017, this provision of the Rule requires federal contractors and subcontractors to provide wage statements to covered workers containing information on their wage rate, hours worked, overtime hours, and any additions or deductions from wages.  Independent Contractor relationships must also be placed on notice.


For detailed information on the Rule, contractors can review the DOL’s dedicated webpage here.

Action Items

  1. Review the text of both Rules here and here.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

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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