HRMN 408 WEEK 4: Drug Testing and Progressive Discipline

CHAPTER 22

• Statutory Framework

• Executive Orders

• Rehabilitation Act

• Veterans

• Drug-Free Workplace

• Affirmative Action

• Reporting Waste, Fraud, and Abuse

• State and Local Government Contractors

Government Contractors and Grantees

C o p y r i g h t 2 0 1 7 . S o c i e t y F o r H u m a n R e s o u r c e M a n a g e m e n t .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/9/2022 1:35 PM via UNIVERSITY OF MARYLAND GLOBAL CAMPUS AN: 1697333 ; Charles Fleischer.; The SHRM Essential Guide to Employment Law : A Handbook for HR Professionals, Managers, Businesses, and Organizations Account: s4264928.main.eds

Book: The SHRM Essential Guide to Employment Law : A Handbook for HR Professionals, Managers, Businesses, and Organizations. Author: Charles Fleischer Date: 2017

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The SHRM Essential Guide to Employment Law396

Organizations that choose to do business with the federal govern- ment must comply with the same employment laws that apply to purely private-sector employers. In addition, a number of require- ments are uniquely applicable to government contractors. This chapter highlights some of the more important requirements.

STATUTORY FRAMEWORK The four basic statutes governing employer-employee relations of U.S. government contractors are the Walsh-Healey Public Contracts Act, the Davis-Bacon Act, the McNamara-O’Hara Service Contract Act, and the Contract Work Hours and Safety Standards Act.

Walsh-Healey Public Contracts Act The Walsh-Healey Public Contracts Act requires contractors engaged in the manufacturing or furnishing of materials, supplies, articles, or equipment to the U.S. government or Washington, D.C., to pay employees who produce, assemble, handle, or ship goods under contracts exceeding $10,000 the federal minimum wage for all hours worked and time-and-a-half their regular rate of pay for all hours worked over 40 in a workweek.

Davis-Bacon Act The Davis-Bacon Act requires all contractors and subcontractors performing on federal contracts in excess of $2,000 for the con- struction, alteration, or repair of public buildings or public works to pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits, as determined by the secretary of labor, for corresponding classes of laborers and mechanics employed on similar projects in the area.

McNamara-O’Hara Service Contract Act The McNamara-O’Hara Service Contract Act (SCA) applies to con- tracts entered into by the U.S. government, the principal purpose of which is to furnish services to the government. The SCA requires

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contractors and subcontractors performing services on covered fed- eral contracts in excess of $2,500 to pay service employees in various classes no less than prevailing wage rates found in the locality or the rates (including prospective increases) contained in a predecessor contractor’s collective bargaining agreement. The SCA also requires that employees receive fringe benefits and paid vacations and holi- days. Safety and health standards also apply to such contracts.

Contract Work Hours and Safety Standards Act The Contract Work Hours and Safety Standards Act (CWHSSA) requires contractors and subcontractors on prime contracts in excess of $100,000 to pay their laborers and mechanics one and one-half times their basic rates of pay for all hours over 40 worked on covered contract work in a workweek.

While the CWHSSA’s overtime requirement is similar to the Fair Labor Standards Act (FLSA), discussed in Chapter 5, the exemptions are not identical. For example, the FLSA exempts drivers, drivers’ helpers, loaders, and mechanics for motor car- riers whose duties affect safe operation of commercial motor vehicles in interstate commerce and who are subject to regula- tion by the U.S. Department of Transportation; the CWHSSA does not.

EXECUTIVE ORDERS In addition to statutory provisions, executive orders issued by the president, as head of the executive branch, impose a variety of requirements that must be included in procurement contracts between government contractors and executive branch depart- ments. These requirements, along with any other legal require- ments, are generally set out in the Federal Acquisition Regulation. The more significant executive orders (EOs) are described below.

Executive Order 11246 In 1965, President Lyndon Johnson issued EO 11246. As subse-

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The SHRM Essential Guide to Employment Law398

quently amended, EO 11246 requires all nonexempt government contracts to contain provisions pursuant to which the contractor agrees to the following:

• not to discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin

• to take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, religion, sex, or national origin (dis- cussed later in this chapter)

• to post notices of its obligations under EO 11246 in the work- place and to furnish notices to labor unions with which it has a collective bargaining agreement

• to include an equal opportunity provision in all employment ads and postings

• to furnish certain information and reports to the secretary of labor

• that the contract may be canceled for noncompliance • to include all these same contract provisions in contracts with nonexempt subcontractors and vendors

Within the U.S. Department of Labor (DOL), administration of EO 11246 is handled by the Office of Federal Contract Com- pliance Programs (OFCCP). Under authority of EO 11246, the OFCCP has exempted the following:

• from all EO 11246 requirements: contracts and subcontracts of $10,000 or less

• from EO 11246 reporting requirements: prime contractors and first-tier subcontractors that have fewer than 50 employees or whose contracts are for less than $50,000, and all second-ti- er and lower subcontracts

• from EO affirmative action requirements: contractors that have fewer than 50 employees or whose contracts are for less than $50,000

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ALERT! An exemption from EO 11246 requirements does not excuse an employer from com-

plying with other, generally applicable nondiscrimination, record-keeping, and report-

ing laws.

Nonexempt government contractors are required to file an Employer Information Report, (EEO-1 report) within 30 days after the award of a contract and annually thereafter. (EEO-1 report requirements are covered in Chapter 14.)

Executive Order 12989 EO 12989, signed by President Clinton in 1996, provides for debar- ment of government contractors that fail to comply with the employ- ment provisions of the Immigration and Nationality Act. Under the order, whenever the attorney general determines that a contractor is not in compliance, he or she is required to transmit that deter- mination to the contracting agency. The agency is then required to consider possible debarment of the contractor.

Executive Orders 13201 and 13496 In 2001 President George W. Bush issued EO 13201 requiring con- tractors to post a notice—the so-called Beck notice—in the workplace informing nonunion employees of their right to opt out of paying union dues. Shortly after President Obama took office, he issued EO 13496 revoking President Bush’s order and requiring contrac- tors to post a notice informing employees of their rights under the National Labor Relations Act to bargain collectively and engage in other protected, concerted activities. What the current administra- tion may do about the notice requirement remains to be seen.

Executive Order 13495 EO 13495 and associated regulations require that workers on a fed- eral service contract who would otherwise lose their jobs as a result of the completion or expiration of a contract be given the right of

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The SHRM Essential Guide to Employment Law400

first refusal for employment with the successor contractor. The regulations apply to all service contracts (prime and subcontracts) above the $150,000 threshold that succeed contracts for the same or similar services at the same location. Managers and supervisors are exempt from the right-of-first-refusal requirement.

Executive Order 13658 Most federal contractors and their subcontractors are required by EO 13658 to pay a minimum wage, set at $10.35 per hour beginning January 1, 2018 and indexed thereafter based on the Consumer Price Index.

Executive Order 13672 EO 13672 prohibits contractors and subcontractors with contracts in excess of $10,000 from discriminating on the basis of sexual orientation and gender identity and requires them to include these additional protected categories in their equal employment opportunity (EEO) policies and notices.

Executive Order 13673 Known as the Fair Pay and Safe Workplaces rule, and dubbed the Blacklisting rule, EO 13673 (the provisions of which were later included in the Federal Acquisition Regulation), required most fed- eral contractors to self-report a range of labor law violations and to provide detailed wage statements to employees. Contractors with contracts of at least $1 million were also prohibited from requiring employees to agree to mandatory arbitration of Title VII discrimi- nation claims. A federal judge in Texas issued an injunction against portions of the rule. In early 2017, Congress adopted a resolution under the Congressional Review Act, that was later approved by the president, permanently revoking the rule.

Executive Order 13706 Joining a trend set by a number of state and local jurisdictions,

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President Obama issued EO 13706 in September 2015 directing the secretary of labor to develop regulations mandating paid sick leave for most U.S. government contractors. DOL issued regula- tions in September 2016, applicable to contracts entered into or renewed beginning January 1, 2017. Under the rule, employees accrue one hour of paid leave for every 30 hours working on or in connection with the government contract. (Exempt employees are presumed to work 40 hours per week, even if they actual- ly clock more time.) Contractors may limit the amount of leave accrued to 56 hours per year, but accrued leave may be carried forward from year to year. Accrued leave on termination does not need to be cashed out, but if the employee is rehired within 12 months, any forfeited leave must be reinstated.

Leave under the rule may be used (in increments as small as one hour) for (a) the physical or mental illness, injury, or medi- cal condition of the employee; (b) obtaining diagnosis, care, or preventive care from a health care provider by the employee; (c) caring for the employee’s child, parent, spouse, domestic part- ner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or need for diagnosis, care, or preventive care described in (a) or (b); or (d) victims of domestic violence, sexual assault, or stalking, if the time absent from work is for the purposes described in (a) or (b) or to obtain additional counseling, seek relocation, seek assistance from a victim services organization, take related legal action, or assist an individual related to the employee as described in (c) in engaging in any of these activities.

Under the rule, if the employer provides paid time off (PTO) accruing at a rate of one hour for every 30 hours worked and allows employees to use PTO for any purpose, the employer is in compliance with the rule, even if the employee uses all accrued PTO for vacation and has none left for the purposes specified in the regulations.

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ALERT! Most U.S. government contractors are required to use E-Verify for verifying the employ-

ment eligibility of all employees assigned to the contract and all other employees work-

ing in the U.S. (See Chapter 21 for more on E-Verify.)

REHABILITATION ACT The Rehabilitation Act of 1973 served as a model for the 1990 Amer- icans with Disabilities Act (ADA), covered in Chapter 17. Both laws address, in similar terms, employment discrimination against per- sons with disabilities. While the ADA applies to all employers with 15 or more employees, the Rehabilitation Act is limited to federal contractors and subcontractors whose contracts exceed $10,000.

In addition to prohibiting disability discrimination and requiring reasonable accommodation, the Rehabilitation Act requires inclu- sion of an equal opportunity clause in the contract itself. The Reha- bilitation Act also requires contractors with 50 or more employees and contracts of $50,000 or more to have written affirmative action plans for employing persons with disabilities.

The OFCCP administers and enforces the Rehabilitation Act’s federal contractor requirements.

VETERANS The Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) applies to federal contractors and subcontractors whose contracts exceed $10,000. VEVRAA prohibits discrimination against “special disabled veterans” and “veterans of the Vietnam era.” A spe- cial disabled veteran is defined generally as a veteran who has a 30 percent or greater disability rating or who was released from active duty because of a service-related disability. A Vietnam-era veteran is defined generally as a veteran (other than a veteran with a dishon- orable discharge) who served in Vietnam or who served between August 1964 and May 1975 regardless of location.

In addition to prohibiting discrimination against disabled and Vietnam-era veterans, VEVRAA requires inclusion of an equal

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opportunity clause in the contract itself. VEVRAA also requires contractors with 50 or more employees and contracts of $50,000 or more to have written affirmative action plans for employment of disabled and Vietnam-era veterans. The OFCCP administers and enforces VEVRAA’s federal contractor requirements.

DRUG-FREE WORKPLACE The Drug-Free Workplace Act (DFWA) requires most federal con- tractors and federal grant recipients to take the following actions:

• adopt and publish a policy prohibiting the unlawful manufacture, distribution, dispensation, possession, or use of a controlled sub- stance in the workplace and specifying the disciplinary action that will be taken for violations

• establish a drug-free awareness program to inform employees about the dangers of drug abuse and the availability of any drug counseling, rehabilitation, and employee assistance programs

• require employees to notify the employer within five days of any criminal convictions relating to drug violations in the workplace

• notify the federal granting or contracting agency within 10 days after receiving notice of the conviction

• either discharge the convicted employee or require him or her to participate satisfactorily in a drug abuse assistance or rehabilita- tion program

AFFIRMATIVE ACTION Federal contractors and subcontractors covered by the affirma- tive action requirements of EO 11246, the Rehabilitation Act, and VEVRAA must take affirmative actions to recruit and advance qualified minorities, women, persons with disabilities, and covered veterans. Affirmative actions include training programs, outreach efforts, and other positive steps. These procedures, known as affir- mative action plans (AAPs), should be incorporated into the compa- ny’s written personnel policies. Employers with written AAPs must implement them, keep them on file, and update them annually.

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The SHRM Essential Guide to Employment Law404

Although the OFCCP has posted sample AAPs on its website, this is probably a topic on which outside expert advice is warranted.

REPORTING WASTE, FRAUD, AND ABUSE Federal whistle-blower laws and regulations protect employees of U.S. government contractors, subcontractors, and grantees from discharge, demotion, or any other form of adverse employment action as a repri- sal for reporting information that the employee reasonably believes is evidence of gross mismanagement of a federal contract or grant, gross waste of federal funds, abuse of authority, a danger to the public health or safety, or a violation of a law, rule, or regulation relating to the contract or grant. Reports are protected if made to the following:

• a member of Congress or representative of a congressional committee

• an inspector general • the Government Accountability Office • a federal employee responsible for oversight of the contract or grant

• an official of the U.S. Department of Justice or other law enforce- ment agency

• a court or grand jury • a management official or other employee of the contractor, subcontractor, or grantee who has responsibility to address misconduct

Thus, internal reports are now fully protected, as well as reports to government officials. Further, the Federal Acquisition Regulation prohibits confidentiality agreements that restrict an employee’s right to report waste, fraud, or abuse. (See the suggested confidentiality disclaimer in Figure 19.2.)

STATE AND LOCAL GOVERNMENT CONTRACTORS State and local procurement regulations often have their own requirements. Typical are provisions requiring public works con-

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tracts to contain nondiscrimination clauses, requiring contractors to place similar clauses in all subcontracts, and requiring contractors to post notices informing employees of the nondiscrimination clauses.

Companies doing business with a state or local government may also be required to pay a prevailing wage or a specified living wage to employees doing work on the contract.

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