In late August of this year, the US government issued a final rule amending the Federal Acquisition Regulation to implement Executive Order 13673, “Fair Pay and Safe Workplaces” (the “E.O.”). In addition, the Department of Labor issued its final guidance to assist contracting agencies in implementing the E.O. The new rule and guidance represent significant new obligations and risks for federal contractors and subcontractors, who should start preparing to address them now. The rule and guidance focus primarily on contractor and subcontractor “responsibility” based on several labor laws. Responsibility is a critical concept because the government will only conduct business with responsible companies. The rule also specifies other requirements, including a restriction on arbitration with employees and independent contractors, and paycheck transparency requirements. The new rule creates a sprawling and often complicated set of regulations and procedures that involve a mixture of procurement law and labor law concepts. Its substantial impact is illustrated by the fact that the government estimates the 10-year cost of the rule to exceed $4 billion.

The rule specifies requirements concerning interactions between contracting officers and prime contractors, contracting officers and new agency labor advisors, prime contractors and subcontractors, and subcontractors and the Department of Labor. Companies need to understand these requirements, some of which will begin to be implemented later this month. The rule and guidance also introduce new concepts and several important new definitions that will require careful analysis.

Please join our government contracts and labor law lawyers—who are intimately familiar with the new rule and guidance—for a discussion of the associated burdens and risks, new concepts and definitions, and strategies for navigating this new regulatory regime.

CLE credit is pending.

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For additional information, please contact Pascale Rucker at prucker@mayerbrown.com or +1 202 263 3321.

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