Government Contracts FAC 2005-100 Issued with Three Final Rules
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Monday, September 10, 2018

FAC 2005-100 Issued with Three Final Rules

By Government Contracts Editorial Staff

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have issued Federal Acquisition Circular 2005-100, which contains three final rules amending the Federal Acquisition Regulation: Item I—Paid Sick Leave for Federal Contractors (FAR Case 2017-001); Item II—Non-Retaliation for Disclosure of Compensation Information (FAR 2016-007); and Item III—Technical Amendments. The technical amendments make editorial changes and update web links. The FAC also contains a Small Entity Compliance Guide, which indicates a regulatory flexibility analysis was prepared for Items I and II. A full listing of the regulations impacted by the rules appears in the FAC regulation table below. The rules went into effect on August 22, 2018. For the text of FAC 2005-100, see ¶70,002.204.

Paid Sick Leave. The interim rule in FAR Case 2017-001, issued in FAC 2005-93, has been finalized without change. The interim rule amended the FAR to implement Executive Order 13706 and a September 30, 2016, Department of Labor final rule, both entitled “Establishing Paid Sick Leave for Federal Contractors.” The E.O. sought to increase efficiency and cost savings in work performed by contractors by ensuring their employees can earn up to seven days or more of paid sick leave annually, including paid sick leave for family care. The interim rule required contractors to allow all employees performing work on or in connection with a contract covered by the E.O. to accrue and use paid sick leave in accordance with E.O. 13706 and 29 CFR Part 13.

New Subpart. Specifically, the rule added new FAR Subpart 22.21 to prescribe policies and procedures that implement these requirements. The subpart includes applicable definitions (FAR 22.2101), specifies the government’s policy on sick leave (FAR 22.2102), and identifies applicable contracts (FAR 22.2103) and exclusions (FAR 22.2104). It also provides information on basic paid leave requirements (FAR 22.2105), prohibited acts (FAR 22.2106), waiver of rights (FAR 22.2107), and requirements for multiemployer plans or other funds, plans, or programs (FAR 22.2108).FAR 22.2109 sets forth the procedures for enforcing the paid sick leave requirements. Also, FAR 22.2110 prescribes the use of a new clause, FAR 52.222-62, Paid Sick Leave Under Executive Order 13706, in solicitations and contracts that include the clause at FAR 52.222-6, Construction Wage Rate Requirements, or FAR 52.222-41, Service Contract Labor Standards, where work is to be performed in the United States. The rule does not exempt contracts at or below the simplified acquisition threshold or commercial items contracts.

Compensation Information. The Councils also finalized the interim rule in FAR Case 2016-007 without change. The interim rule, issued in FAC 2005-91, amended the FAR to implement Executive Order 13665, Non-Retaliation for Disclosure of Compensation Information.E.O. 13665 amended E.O. 11246, Equal Opportunity in Federal Employment. This FAR case also implements a final rule issued by the Department of Labor’s Office of Federal Contract Compliance Programs, Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions (80 FR 54934). E.O. 11246 established nondiscrimination and affirmative action obligations in employment for federal contractors and subcontractors. It prohibits employment discrimination because of race, color, religion, sex, sexual orientation, gender identity, and national origin. E.O. 13665 amended E.O. 11246 by incorporating, as a covered prohibition, discriminating against employees and job applicants who inquire about, discuss, or disclose the compensation of the employee or applicant or another employee or applicant. Contractors and subcontractors must disseminate this nondiscrimination provision, using language prescribed by the Director of OFCCP. The new provision must be incorporated into existing employee manuals or handbooks and posted so that it is available to employees. The FAR implements E.O. 11246 in FAR Subpart 22.8 and the clause at FAR 52.222-26, Equal Opportunity. The interim rule added the new discrimination prohibition and incorporated the DOL rule’s definitions of “compensation,” “compensation information,” and “essential job functions” into FAR 52.222-26. As specified in FAR 22.802, the rule prohibits contractors from discharging, or in any other manner discriminating against, any employee or applicant for employment because the employee or applicant inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant.

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