Dive Brief:

• Federal contractors will need to pay attention to and comply with laws that protect worker safety, wages and civil rights in order to be eligible for federal contracts, according to the U.S. Department of Labor and the Federal Acquisition Regulatory Council, which released final regulations and guidance implementing the Fair Pay and Safe Workplaces Executive Order, also known as the "blacklisting rule."
• Signed by President Barack Obama in July 2014, the order requires prospective federal contractors to disclose labor law violations and gives agencies more guidance on how to consider labor violations when awarding federal contracts. The rule is largely designed to ensure contracts don't go to employers with a history of rule violations.
• According to the Labor Dept. statement, the regulations and guidance, which were published in the federal register today (Aug. 25), are designed to increase efficiency and cost savings by ensuring that federal contractors are responsible and provide basic workplace protections. The guidance also creates a process for agencies and the department to help contractors come into compliance with labor laws.

Dive Insight:

The rule goes into effect Oct. 25. Attorneys who represent affected employers were not positive about the new regulations.

David Goldstein, a shareholder and co-chair of Littler’s Government Contractors Industry Group and OFCCP Practice Group, didn't mince words over the ne regulation. "These new rules waste government resources by requiring a constant rehashing of prior decisions, will almost undoubtedly result in inconsistent determinations regarding contractor compliance, and will impose huge and unfair costs on employers," he said. "It is difficult to overstate just how misguided this rule is as a matter of either public policy or political principle."

Connie N. Bertram,  partner and co-chair of the Government Contractor Compliance Group at Proskauer, told HR Dive that “the disclosure obligations required by the Rule add a ’twist’ to the risk management analysis. Now contractors will have to look backwards and forwards in preparing their disclosures in assessing whether violations and violations flowing from pending claims and investigations could be found to be serious, repeated, pervasive or willful.”

She added that there has been widespread concern that federal agencies and private litigants will use the Order to coerce settlements. The thought is that they will use the threat of having to report violations as a tool to encourage early (and potentially more lucrative) settlement so the claimed violation does not need to be reported.

For affected employers, Proskauer will discuss the implications of the final rule at a webinar on September 13, 2016.