Are you a federal contractor or subcontractor?

In addition to the various regulations and laws that are currently in place, if your company is a federal contractor or subcontractor, there are several changes that have recently been announced that you should be aware of.

On September 26, 2014,  the U.S. Department of Labor (DOL) published a final rule that reduces reporting requirements for federal contractors and subcontractors who hire and employ veterans under provisions of the Vietnam Era Veteran’s Readjustment Assistance Act of 1974 (VEVRAA).

These regulations are, in part, a direct response to DOL’s first round of updates to federal regulations implementing VEVRAA — updates that became effective in March of this year. The initial updates to VEVRAA were intended to strengthen the affirmative action provisions to aid contractors in efforts to recruit and hire protected veterans.

Now, DOL has implemented this second round of regulations relating to reporting requirements.

The final rule revises the VETS-100A Report and renames it the VETS-4212 Report. The VETS-100 Report will no longer be used.

The VETS-4212 Report requires contractors to report specified information on protected veterans in their workforce in the aggregate, rather than for each category of veterans protected under the statute, reducing the required reporting elements by almost half, from 82 to 42. Under VEVRAA, the term “protected veterans” includes: disabled veterans, veterans who served on active duty during a war or campaign for which a campaign badge was authorized, veterans who were awarded an Armed Forces Service Medal and recently separated veterans. Contractors and subcontractors will have to comply with the reporting requirements in the Final Rule beginning with the annual report filed in 2015.

“Over the next decade, this change will result in a significant reduction in paperwork burden for federal contractors and subcontractors,” said Assistant Secretary of Labor for Veterans’ Employment and Training Keith Kelly. “In addition to easing the burden on contractors, the data collected by these reports will help the Labor Department develop more informative yearly trends in the employment of protected veterans.”

The final rule was published in the Federal Register.

Note: the current season for Vets 100/100A ends on September 30.

On October 1st, Labor Secretary Thomas Perez issued the final rule raising the minimum hourly wage for employees working on covered federal contracts from $7.25 to $10.10.  The final rule implements Executive Order 13658, which President Obama signed last February.

The final rule controls all covered contracts issued for solicitation after January 1, 2015.  Covered contracts include (1) all contracts for construction covered by the Davis-Bacon Act, (2) service contracts exceeding $2,500 covered by the Service Contract Act, (3) concessions contracts, such as contracts to furnish food, lodging, automobile fuel, souvenirs, newspaper stands, and recreational equipment, and (4) contracts to provide services, such as child care or dry cleaning, on federal property for federal employees or the general public.

The minimum wage requirement applies to all employees subject to the Fair Labor Standards Act, including those disabled employees who were previously eligible for subminimum wage under a statutory exemption.  The rule also more than doubles the minimum hourly wage for covered tipped employees beginning January 1, 2015, bringing the rate from $2.13 to $4.90 per hour, and requiring employers to make up the difference if tips do not bring the employee at least to $10.10 per hour.  This tipped minimum rate will increase 95 cents per year until the tipped minimum wage equals 70 percent of the minimum wage for non-tipped employees.  The $10.10 minimum wage will also be readjusted yearly and keyed to the consumer price index.

Covered contractors and subcontractors must include a minimum wage clause in all contracts and subcontracts.  The rule also establishes limitations regarding pay periods, deductions, and recordkeeping. The Department of Labor’s Wage and Hour Division will be responsible for enforcing the rule’s prohibitions against kickbacks and retaliation.

The Department of Labor fact sheet and frequently asked questions on the final rule are available here and here.


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The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.