Service Contract Act—New Requirement Nondisplacement of Qualified Workers The “Right of First Refusal” Rule UTSA SBDC-PTAC Networking Breakfast—July 10,

Service Contract Act—New Requirement

Nondisplacement of Qualified WorkersNondisplacement of Qualified WorkersThe “Right of First Refusal” RuleThe “Right of First Refusal” Rule

UTSA SBDC-PTAC Networking Breakfast—July 10, 2013© Copyright: Cannot be copied or distributed without the written consent of an Onsi Group authorized representative.

PRESENTED BY

© Copyright: Cannot be copied or distributed without the written consent of an Onsi Group authorized representative.

BackgroundBackground

Executive Order 13495 Issued on January 30, 2009

Effective January 18, 2013

Purpose Economy and efficiency

Carryover workforce reduces disruption in delivery of services during transition period between contractors

Benefit of an experienced and trained workforce that’s familiar with the Government’s personnel, facilities, and requirements

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BackgroundBackground

Coverage Applicable ONLY to Solicitations for Service Contracts

issued on or after January 18, 2013

Applies to the Prime and each of its Subcontractors

Dollar value of contract must be in access of $150,000

DOL Enforcement All complaints must be filed with DOL’s Wage & Hour

Division with 120 days from the first date of contract performance

All complaints will be handled initially by DOL’s DC office

Contact info for complaints: 202-693-1399 or [email protected]

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mailto:[email protected]


Contracting AgencyContracting Agency

Contracting Agency Requirements Incorporate contract clause 48 CFR 52.222-17

Now a mandatory clause for all Service Contracts

Currently, if not incorporated, DOL asking the Contracting Office to incorporate, then DOL enforces

Starting FY2014, DOL may enforce using the Christian Doctrine

GSA has now added the clause to its contracts

Direct the Predecessor Contractor to provide notice to its service employees of their possible right of an offer of employment

Provide Incumbent Contractor’s List to Successor

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Contracting AgencyContracting Agency

Contracting Agency Requirements—Continued If complaint is filed, within 14 days of receiving notice of the

complaint from DOL, must forward at least the following information to DOL:

Was the Solicitation issued after January 18, 2013?

Was the FAR clause 52.222-17 incorporated into the Contract?

Did the Predecessor provide Notice to its service employees?

Was the Incumbent Contractor’s List provided to the Successor?

A copy of the Incumbent Contractor’s List

A copy of all service employee statements obtained by the Agency

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ContractorContractor

Contractor Requirements Successor cannot fill any open positions until after an offer

of “first right of refusal” has been extended to incumbent employees

Only required for those incumbent employees who worked during the last month of performance on the predecessor contract

Successor must still comply even if “Incumbent Contractor List” is not provided

Unlike the SCA vested vacation requirement which successors often have up to one year after SCA anniversary date for compliance, the “right of first refusal” requirement is immediate

Note: Agency can withhold predecessor’s last payment if Incumbent Contractor List is not provided

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Contractor Requirements--Continued

Offer of employment can be oral or written

Strongly recommend written offers so avoid “he said/she said”

Must be provided in language that employee understands

Must give incumbent service employee at least 10 days to accept/decline the offer of employment

If the Award date and the Start date are less than 10 days, then service employee must make an independent decision and DOL will advise employee that the “short” lead time between Award and Start date must be taken into consideration with regard to the time limit

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Once employee declines, even if comes back within the minimum 10 day period, the Successor contractor has met its obligation and does not have to hire the incumbent employee

Predecessor contractor must provide a certified Incumbent Contractor List not less than 30 days before completion of contract

Any changes in the workforce after the initial submission must be update not less than 10 days before completion of the contract

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Successor contractor can offer the incumbent service employee:

a different position on the new contract if the employee is qualified for that new position

different pay rate and benefits

so long as the reason is not related to a desire that the employee refuse the offer or that other employees be hired for the position

DOL will look at the facts of each scenario

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Exceptions:

Nondisplaced employees—if retained by the predecessor then not “displaced” so no requirement of successor to offer position

Successor’s current employees—worked for contractor or subcontractor for at least 3 months immediately preceding the commencement of the contact and would be face lay-off/discharge

Predecessor contractor’s non-service employees—those employees exempt under FLSA

Employee’s past unsuitable performance—must have a prior written evaluation of failure to perform suitably on the job; cannot reply on hearsay

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ContractorContractor Contractor Requirements--Continued

Exceptions:

Non-Federal work—worked on multiple contracts with the predecessor as part of a “single job” for the predecessor

Reduced staffing—any open positions within first 90 days of contract start date Successor contractor must provide a “first right of refusal” to any remaining eligible incumbent employees

Contractor determines which employees—Successor does not have to make “first right of refusal” offers based on incumbent seniority; DOL does not consider it discrimination to hire the newest incumbent employees (who only have up to 2 weeks of SCA vested vacation benefits) over the longer serving incumbent employees (who have 3 to 5 weeks of SCA vested vacation benefits)

Changes to staffing pattern—Successor must make a best effort attempt to offer positions to the greatest number of incumbent employees

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1) Are SCA stipulations included in contract?

2) Does contract have correct WD?

3) Are the SCA poster & WD, including any Conformance actions, posted at the site or made available to employees?

4) Does WD contain necessary classifications?

5) Is a Conformance necessary?

6) Are employees properly classified (WD & FLSA)?

7) Are fringe benefits properly paid?

8) Is Overtime correctly paid under the FLSA or CWHSSA, if appropriate?

9) Has employer kept accurate payroll records?

DOL Investigation IssuesDOL Investigation Issues

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• This presentation is intended as general information only and does not carry the force of legal opinion.

• The Onsi Group is providing this information as a public training service. This information and related materials are presented to give the public access to information on related to the Service Contract Act of 1965. You should be aware that, while we try to keep the information timely and accurate, there will often be a delay between official publications of the materials and the modification of these pages. Therefore, we make no express or implied guarantees. The Federal Register and the Code of Federal Regulations remain the official source for regulatory information published by the Department of Labor. We will make every effort to keep this information current and to correct errors brought to our attention.

© Copyright: Cannot be copied or distributed without the written consent of an Onsi Group authorized representative.13

DisclaimerDisclaimer

QUESTIONS?QUESTIONS?© Copyright: Cannot be copied or distributed without the written consent of an Onsi Group authorized representative. 14


THANK YOUTHANK YOU

Angela Hendrix, JD—Founder & President200 E Grayson, Suite 104, San Antonio, TX 78215

210-547-3672 (o); 210-831-1550 (c)[email protected]

[email protected]

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Documents

Service Contract Act—New Requirement Nondisplacement of Qualified Workers The “Right of First Refusal” Rule UTSA SBDC-PTAC Networking Breakfast—July 10,