As daily headlines have shown, the economic fallout from the COVID-19 pandemic has led businesses of all types to announce dramatic changes in workforce levels and employee pay. Many of these companies have made the decision to reduce the salaries they pay to their exempt employees.
California, Connecticut, Illinois, Pennsylvania, and New York have all issued statewide shelter-in-place orders in response to the COVID-19 pandemic, and more states may follow. Employers that do not qualify for an exemption under the applicable state order or that decide to severely curtail or shut down operations may want to consider some of the following issues.
On March 20, 2020, Illinois joined California, New York, and Pennsylvania in issuing a sweeping closure order to contain the spread of COVID-19. Illinois Governor J.B. Pritzker issued Executive Order 2020-10, Executive Order in Response to COVID-19 (COVID-19 Executive Order No. 8), directing “all individuals currently living within the State of Illinois . . . to stay at home” except as necessary for “Essential Activities, Essential Government Functions, or to operate Essential Businesses and Operations.”
On January 12, 2018, the Maryland General Assembly overrode Republican Governor Larry Hogan’s May 25, 2017 veto of legislation requiring Maryland employers to provide sick and safe leave to their employees. By overriding the governor’s veto, the general assembly made Maryland the ninth state to adopt a mandatory sick leave statute. Maryland’s legislation, known as the Maryland Healthy Working Families Act, provides employees with up to 40 hours of sick and safe leave annually.
Montgomery County, Maryland, has approved Bill 28-17, which increases the countywide minimum wage from $11.50 to $15.00. The nine-member Montgomery County Council voted unanimously in support of the bill on November 7, 2017, and County Executive Isiah Leggett signed the measure into law on November 13, 2017.
It’s not quite time for federal contractors to pop the cork and pour the champagne, but it may be time to get out the flutes and chill a bottle.
Employers in the District of Columbia (D.C. or District) found a lump of coal in their holiday stockings this year thanks to the D.C. Council’s passage of the Universal Paid Leave Amendment Act of 2016 (UPLA) on December 20, 2016. The UPLA creates the most expansive paid leave benefits in the nation, enabling employees to receive a combination of paid leave, which can include up to eight weeks of parental leave, six weeks of family medical leave, and two weeks of personal medical leave every year.
On October 24, 2016, the U.S. District Court for the Eastern District of Texas entered a nationwide injunction preliminarily enjoining the Obama administration from implementing final rules to effectuate Executive Order 13673, Fair Pay and Safe Workplaces. The federal court’s decision came in the context of a lawsuit brought by trade associations challenging the final rules as an unauthorized and unconstitutional exercise of the President’s authority.
On October 24, 2016, a Texas judge issued a preliminary injunction in a case challenging the so-called contractor blacklisting rules, which were scheduled to take effect today, October 25.
The regulatory onslaught for federal contractors just won’t stop. The “contractor blacklisting” regulations implementing Executive Order 13673, Fair Pay and Safe Workplaces are set to take effect by the end of this month. On September 29, 2016, the U.S. Department of Labor (DOL) issued a final rule to implement Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors, which means that contractors’ human resources and legal teams will have another set of regulations to parse and implement by the end of the year.
The District of Columbia may soon join Massachusetts in prohibiting employers from asking job candidates about their prior salary histories. On September 20, 2016, legislation known as the “Fair Wage Amendment Act of 2016” (FWAA), B21-0878, was introduced in the Council of the District of Columbia by Councilmember David Grosso (I-At-Large) and six other councilmembers, and was cosponsored by four other members. (In total, the Council of the District of Columbia consists of 13 members.) According to Grosso, the measure is aimed at preventing new employers from perpetuating the lower levels of pay experienced historically by women and minorities in the District of Columbia.
The arbitration restrictions contained in Executive Order 13673, Fair Pay and Safe Workplaces (EO 13673), have been largely overshadowed by other parts of the so-called “contractor blacklisting” rules. Nonetheless, for those federal contractors that have adopted or are considering adopting an employee arbitration program, the arbitration restrictions in EO 13673 are just as significant—and more imminent. On August 24, 2016, the White House announced the release of the final blacklisting rules, along with a gradual phase-in schedule that starts on October 25, 2016. While the final rules will not be in full effect for the next couple of years, the arbitration restrictions contained therein are set to take effect in just a few weeks. Between now and October 25, contractors that want to retain existing arbitration programs or implement new arbitration programs need to evaluate new limitations imposed by the final rules.
The long wait for the so-called “contractor blacklisting” rules is over. According to a fact sheet released by the White House, final regulations and guidance will be released on August 24, 2016 and published in the Federal Register on the following day. The final regulations and guidance (the final rules) are being issued by the Federal Acquisition Regulatory Council (FAR Council) and the U.S. Department of Labor (DOL) to implement Executive Order No. 13673, Fair Pay and Safe Workplaces (EO 13673), which President Obama signed in July 2014. In addition, the president also amended EO 13673, just before the White House’s blacklisting announcement, to add language that seems intended to better insulate the final rules against litigation challenging their constitutionality and their conflict with other federal statutes.
The National Labor Relations Board (NLRB) fired off some fireworks of its own just before the Fourth of July weekend. Specifically, the NLRB announced a new procedure to implement Executive Order 13673 Fair Pay and Safe Workplaces (EO 13673), and facilitate the flow of NLRB case data into the databases used by contracting agencies. The goal of the procedure is to identify employers with federal contracts and ensure that federal contracting agencies know when the NLRB has issued a complaint against a federal contractor. The timing of the new procedure is curious, since the final regulations and guidance to implement EO 13673 are still being reviewed by the White House’s Office of Management and Budget, and the U.S. House of Representatives and U.S. Senate are debating legislation that would exclude defense contractors from the EO 13673 framework.
Many trade associations have little direct experience with union organizing and labor relations. When it comes to lobbying in Washington, D.C., however, trade associations know a thing or two about what it takes to be a successful persuader. In that sense at least, it is not surprising that the U.S. Department of Labor (DOL) singled trade associations out for special attention in the DOL’s final rule on reportable “persuader” activity. Released on March 23, 2016, the final rule dramatically expanded the scope of the activities that have to be reported under the Labor Management Reporting and Disclosure Act of 1959 (LMRDA). Although the final rule was targeted at a broad range of indirect persuader activities, it dedicated much attention to whether and when persuader reporting obligations can be triggered by seminars, newsletters, and other member services that trade associations provide to their employer members.
At last, we have a little good news for government contractors. By a vote of 34–28 taken late in the evening on April 27, 2016, the House Armed Services Committee (HASC) adopted a measure that would block the application of Executive Order 13673, Fair Pay and Safe Workplaces (EO 13673) to the U.S. Department of Defense or the National Nuclear Security Administration. The measure came in the form of the Kline-Wilson Amendment to the National Defense Authorization Act for Fiscal Year 2017 (FY 2017 NDAA). The amendment would spare these two agencies from the reach of the executive order and the implementing regulations and guidance that contractors are awaiting from the Federal Acquisition Regulatory Council (FAR Council) and the U.S. Department of Labor (DOL).
The web of overlapping and incongruent paid sick leave laws in the United States just grew even more complicated. On February 24, 2016, the U.S. Department of Labor (DOL) added yet another set of paid leave obligations to the growing list of paid sick leave mandates that have been adopted by states and municipalities. This latest addition came in the form of a notice of proposed rulemaking (NPRM) to implement Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors (the proposed rule). These new requirements for paid sick leave (PSL) would apply only to employees who work “on or in connection with” certain categories of government contracts that are awarded on or after January 1, 2017.
The U.S. Department of Labor (DOL) has released its Notice of Proposed Rulemaking (NPRM) to implement Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors. The NPRM (currently 286 pages in length) will be published in the Federal Register on Thursday, February 25, 2016, and allows for a brief comment period of only 30 days. Final DOL regulations are due by September 30, 2016, after which the Federal Acquisition Regulatory Council will have to amend the Federal Acquisition Regulation to incorporate the paid sick leave obligations into the required government contracts.
On January 22, 2016, the Federal Acquisition Regulatory (FAR) Council issued a Proposed Rule prohibiting government contractors from using internal confidentiality agreements to restrict employees or subcontractors from making reports of fraud, waste, or abuse to federal officials. This issue attracted congressional attention when reports of the practice surfaced in Washington, D.C.
At a Labor Day speech in Boston, President Obama announced a new executive order that will require federal contractors to provide covered employees with paid sick leave. Executive Order 13706 was published in the Federal Register on September 10, 2015. This is the latest in a series of executive actions by the Obama administration imposing upon federal contractors additional requirements that Congress has declined to impose on other employers. The new order will require covered federal contractors and subcontractors to provide at least one hour of paid leave for every 30 hours worked and will enable employees to earn up to 7 days or more of paid sick leave annually. Employees may use the paid time off to care for themselves or others with whom they are in “the equivalent of a family relationship.” They may also use the time off for absences related to domestic violence, sexual assault, and stalking. A White House fact sheet proclaims that the new executive order will benefit 300,000 workers.
On Labor Day, President Obama announced a new Executive Order that will require federal contractors to provide employees with paid sick leave. The new order, anticipated to apply to new federal contracts entered into on or after January 1, 2017, will require covered federal contractors and subcontractors to provide at least one hour of paid leave for every 30 hours worked and will enable employees to earn up to 7 days or more of paid sick leave annually. Employees may use the paid time off to take care of themselves or family members and also for absences related to domestic violence, sexual assault, and stalking.