Paycheck Transparency and Paid Sick Leave for Federal Contractors
December 28, 2016
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DATE: December 28, 2016
TO: Procurement Directors
Contracting Officers
FROM: Chief
Contract and Financial Assistance Policy Division
Office of Policy
Office of Acquisition Management
SUBJECT: Paycheck Transparency and Paid Sick Leave for Federal Contractors
SUMMARY:
Paycheck Transparency
As noted in Policy Flash 2017-05, on October 24, 2016, the United States District
Court for the Eastern District of Texas issued a preliminary injunction to prevent
certain sections, provisions, and clauses of the final FAR rule (August 25, 2016)
implementing Executive Order (E.O.) 13673, Fair Pay and Safe Workplaces, from
taking effect. On December 16, 2016, the FAR Council issued a final rule
amending sections of the FAR that are affected by the preliminary injunction.
However, the paycheck transparency provisions of the August 25 Fair Pay and
Safe Workplaces rule are not affected by the preliminary injunction. These
provisions, which are contained in FAR 22.2005 and clause 52.222-60, Paycheck
Transparency, require contractors and subcontractors on covered contracts and
subcontracts to provide wage statements containing specified information to
covered workers, as well as a statement to each person classified as an
independent contractor or as exempt under the Fair Labor Standards Act. The
paycheck transparency provisions apply to contractors and subcontractors covered
by the Wage Rate Requirements (Construction) statute (formerly known as the
Davis Bacon Act), the Service Contract Labor Standards statute (formerly known
as the Service Contract Act), and the Fair Labor Standards Act. On or after
January 1, 2017, solicitations that exceed $500,000 must include FAR 52.222-60,
Paycheck Transparency, which flows down to subcontracts covered by the same
statutes exceeding $500,000 (other than subcontracts for commercially available
off-the-shelf items).
The FAR Council final rule may be found at:
https://www.federalregister.gov/documents/2016/12/16/2016-30091/federal-acquisition-regulation-fair-pay-and-safe-workplaces-injunction
Paid Sick Leave for Federal Contractors
As noted in Policy Flash 2017-01, on September 30, 2016, the Department of
Labor (DOL) issued a final rule implementing E.O. 13706: Establishing Paid Sick
Leave for Federal Contractors. The E.O. requires covered contractors and
subcontractors at all tiers to provide covered employees with up to 56 hours of
paid sick leave annually, and to allow those employees to use them for a series of
purposes. For procurement contracts subject to the FAR and the E.O., DOL’s
final rule is explicitly applicable only after the effective date of regulations to be
issued by the FAR Council. On December 16, 2016, the FAR Council issued an
interim rule amending the FAR to implement E.O. 13706, Establishing Paid Sick
Leave for Federal Contractors. The interim rule applies to solicitations on
covered contracts issued, or covered contracts awarded outside of the solicitation
process, on or after January 1, 2017. Specifically, the final FAR rule applies to
contracts under the Wage Rate Requirements (Construction) statute (formerly
known as the Davis Bacon Act) and the Service Contract Labor Standards
statute (formerly known as the Service Contract Act), and subcontracts at all tiers, that
are above the monetary thresholds set forth in those statutes. The E.O. itself
applies to other types of vehicles, like certain “contract-like” instruments, but the
FAR final rule only applies to FAR-based contracts. For existing contracts, the
interim rule directs contracting officers to include the new FAR clause 52.222-62,
Paid Sick Leave Under Executive Order 13706, in bilateral modifications
extending the contract when such modifications are individually or cumulatively
longer than six months. It also “strongly encourage[s]” contracting officers to
include the clause in existing indefinite-delivery indefinite-quantity contracts, if
the remaining ordering period extends at least six months and the amount of
remaining work or number of orders expected is substantial.
The FAR Council interim rule may be found at:
https://www.federalregister.gov/documents/2016/12/16/2016-30090/federal-acquisition-regulation-paid-sick-leave-for-federal-contractors
Questions concerning this policy flash should be directed to: doe_oampolicyflash@hq.doe.gov.