Federal Contractors and Subcontractors Subject to New Notification Requirements

As of June 21, 2010, federal contractors and subcontractors are now required to inform their employees of their rights under the National Labor Relations Act. Specific actions related to the requirements are described below.

Requirements
Under the rule, federal contractors and subcontracts must: 1) post a notice informing employees of their collective bargaining rights, and 2) include a clause in covered federal contracts, subcontracts and purchase orders requiring their subcontractors to post the employee notice as well.

These new requirements resulted from a final rule issued by the Office of Labor-Management Standards (OLMS) in May that implemented President Obama’s Executive Order 13496.

Exceptions and Exemptions
There are exceptions and exemptions from the compliance obligations. For instance, the posting requirements do not apply to prime contracts under the Simplified Acquisition Threshold, which is currently set at $100,000; to subcontracts below $10,000; or to contracts where work is performed exclusively outside the United States.

Penalties
Failure to comply with the new posting requirements or employee notice clause requirements could result in contract/subcontract termination or suspension. In addition, the federal contractor or subcontractor may be deemed ineligible for future government contracts.

More Information
For more information on the new notification requirements, visit the Department of Labor’s website at http://www.dol.gov/olms/regs/compliance/EO13496.htm.