Last week OFCCP held a webinar on how to comply with the new regulations implementing Executive Order 13496. The following (lengthy post) is an edited recap of some of the questions and answers from the OFCCP. Let us know if you have more questions! Please note that “government contract” and “federal contract” are used interchangeably as they are synonymous in the E.O. 13496 regulations.

We’ve divided the question into three categories: coverage, posting requirements and contract clause requirements. The Office of Labor-Management Standards (OLMS) is to be the first point of contact for compliance questions. An audio recording of their presentation is available by dialing 800-333-1825. It will be available until July 2nd.

Coverage under the regulations:

What is the effective date of the rule?

June 21, 2010.

If contracts pre-date June 21, 2010 do we have to comply?

No, those contracts are exempt.

Do the new regulations apply to contracts before the effective date?

The posting requirement only applies to government contracts and subcontracts resulting from solicitations after the final implementation of the rule – June 21, 2010.

On June 21 must all federal contractors start posting the notice or only after they receive a contract with the new clauses?

Only after receiving a contract, or subcontract, with the new clauses does the requirement to post go into effect.

Should we comply immediately or wait until the clause is in a new contract?

You can begin now, but the legal requirement won’t be in place until it is in your contract.

Are banks considered federal contractors for the new requirements since they are depositories of federal funds?

Yes – The regulatory definition of “government contract” would include banks based on two criteria: 1. Deposit insurance (FDIC) is a covered government contract. 2. The issuing and paying of bonds and serving as a federal fund depository also establish coverage.

Are non-union employers required to post the notice? Does the National Labor Relations Act (NLRA) apply to contractors without unions?

Yes, if the employer is a federal contractor or subcontractor, posting the notice is required whether or not their workforce is unionized.

If our employees are not covered by the NLRA must we comply with this rule?

No. For example, employees covered by the Railway Labor Act are exempted from this rule.

Do these regulations apply to the construction industry?

Yes.

Are public sector employers covered?

No. They are excluded in the regulations.

Our organization receives federal aid. Are we covered?

Federal grants and loans are excluded from the definition of government contracts. Accordingly, this rule does not establish coverage based on “federal financial assistance.” For the regulatory definition of “federal financial assistance” see 29 CFR 31.2

Do the regulations apply to contractors doing state work with federal dollars?

It depends on the type of federal dollars. Grants and loans are not covered, as they fall under “federal financial assistance.” Dollars received through federal contracts are covered.

Does accepting Medicare constitute a federal contract and therefore put our company under the new requirements?

OFCCP gave a two part answer: 1.Parts A and B of Medicare do not constitute a federal contract. 2. TRICARE, Federal Employee Health Benefits (FEHB) and other parts of Medicare may create jurisdiction.

Must the requirements be flowed down to other subcontracts?

Yes, the requirements must be flowed down to subcontractors at all tiers. Subcontracts below $10,000 are excluded.

If a state university has federal contracts must it post?

No. Public entities, including states and their subdivisions, are exempt from the NLRA and therefore also exempt from this rule.

We receive Federal Transit Administration (FTA) grant funding. Do we need to follow these regulations?

No, this type of grant is federal financial assistance and not a federal contract.

As a private university receiving funds for research do we need to comply?

It depends on whether the funds are federal financial assistance (see 29 CFR 31.2) or from a contract. Federal financial assistance is not covered under these regulations.

Has the Federal Acquisition Regulation (FAR) council updated their regulations?

They are currently working on an interim final rule that is expected “shortly.” After it has passed, the new clauses will begin to be inserted in federal contracts.

If the contract is for work outside of the US is it covered under these regulations?

If contract is for work exclusively outside of the US there is no coverage. If part of the work is performed in the US the contract is covered.

Posting requirements:

Are there free copies of the poster?

Yes. Online copies suitable for printing can be found on the Office of Labor-Management Standards (OLMS) website.

Must the Executive 13201 notice (“Beck” poster) still be posted?

No, that Order and its regulations have been repealed by Executive Order 13496.

What constitutes “a significant number of the workforce” to require a translation other than English?

OFCCP recommended discussing the situation with OLMS if you suspect a translation may be required. There is no specific number or percentage defined in the regulations.

When will posters in languages other than English be available?

Spanish and Mandarin Chinese language posters are expected shortly and will be available on the OLMS website. Other translations will be provided upon request.

If a union is in place, must we still post the notice?

Yes. Those employees are still covered by the NLRA and have rights under it of which they must now be notified with this poster.

If a majority of our company supports government contracts and there are other offices that don’t support these contracts, must the other offices post the notice if they don’t support the contract?

OFCCP answered this question with another question: are the employees at the other locations engaged in activity related to the performance of the contract? See 29 CFR 471.2d 2 for a more detailed description of “contract-related activity.” The final rule contains examples that include repairers, security, financial, office and clerical personnel as employees contributing to the performance of the contract. The test for “contract-related activity” is “very broad.”

Must we post the notice only at job sites or at our corporate office too?

Definitely at the job sites. You must post at the corporate office too if employees there assist with the fulfillment of the contract. Also, if employees drop in at the corporate office for their paychecks, etc. you would need to post there.

Can we put the new poster just in the break room? If the break room isn’t enough, how many posters must be put up and where?

It is not sufficient to just post in the break room. The notice must be posted throughout the building in a conspicuous manner. There is no specific number of posters or places indicated. OFCCP wants you to remember that the goal is that employees are notified.

How does a contractor post so that a delivery employee gets a notice?

Maybe by time clock where they report or electronically.

How long must this notice stay posted?

The legal obligation to post lasts through the duration of the covered contract.

How do we get the notice to telecommuters?

If most of your communication with an employee is electronic, you must provide the notice electronically. The regulations require that the link to the notice read: “Important Notice about Employee Rights to Organize and Bargain Collectively with Their Employers.”

If we post some notices, but not government ones, electronically do we need to post this electronically?

OFCCP didn’t seem to answer the specific question but seemed to come down on the side that yes you would if you post any notices electronically.

If an employer has a company internet site, but only a few employees have computer access at the worksite would they need to post the notice online?

If they regularly post notices to employees on that site – yes.

We have a board where we post every other required notice. If we put this poster there is that enough?

No. This rule requires “widespread posting.” You should hang it at least where you would post the other posters, but need to post in a “widespread, conspicuous” manner throughout the rest of the building.

The poster is big. Can I shrink it down to one 8.5 x11 page?

No. The poster has to be 11×17 or the two 8.5×11 sheets.

Contract clause requirements:

Do the required contract clauses need to be listed verbatim or can they be incorporated by reference?

The Executive Order 13496 regulations require the inclusion of several clauses in all covered federal contracts, subcontracts and purchase orders. Part 471.2b of the regulations gives permission to include the clauses by reference to “29 CFR Part 471, Appendix A to Subpart A.”

Where are the required contract clauses found?

Appendix A of the new regulations. This section also contains the poster language.

We are a federal contractor, should we include this in contracts with suppliers?

Yes, unless their supplies or services are not necessary to the performance of the contract.

Is a purchase order considered a contract? Must subcontractors and sub-subcontractors comply with this rule?

Purchase orders are considered contracts under these regulations and therefore need to include the contract clauses. All levels of subcontractors are covered by the regulations.

What is a prime contractor’s responsibility for ensuring subcontractor compliance?

If DOL realizes that a number of subcontractors are out of compliance, it may issue a measure requiring the prime contractor to takes steps to increase subcontractor compliance. If the prime contractor refuses to do so, sanctions may be applied.