Compliance Stuff

Federal contractors may face a variety of workforce compliance challenges during the current US federal government shutdown. These challenges include understanding and meeting obligations under federal and state wage and hour laws, the federal Worker Adjustment and Retraining Notification (WARN) Act and state counterparts, as well as addressing issues related to employee benefits, unemployment benefits and union matters. Below are key considerations to help contractors manage these challenges during the shutdown. Wage and hour considerations A furlough temporarily stops employees from working, with the expectation that they will return to work later. This approach allows contractors to reduce labor costs in the short term without terminating employees. When furloughing employees, contractors must comply with federal and state wage and hour laws. For nonexempt employees, employers are only required to pay for hours actually worked. However, exempt employees must receive their full sa...

A government shutdown can be a significant disruption for small business federal contractors. Preparing in advance and taking the proper steps can help mitigate the financial and operational impact of a shutdown. The following is a non-exhaustive set of steps and issues that small business contractors may consider: Review Your Contracts:  Scrutinize every contract for clauses related to funding, stop-work orders, excusable delays, or the Availability of Funds clause (FAR 52.232-18). Identify which contracts are funded by annual appropriations versus those with multi-year or “no-year” funding. This will help you determine which projects are most at risk.  The impact of a shutdown varies greatly depending on the type of contract.  Create a master spreadsheet listing all contracts, agencies, funding status, and current work phases. Fixed-Price Contracts:   You may be required to continue work, even if payments are delayed. If you are ordered to stop, you may be able t...

Reductions in force and furloughs are on the rise. Recent layoff numbers are climbing. We’re seeing some of the highest monthly totals ever recorded. If your company is considering a RIF, thorough preparation is key. Identify and document the reason for the layoff and the criteria that will be used to select impacted employees. Determine whether there will be union notice and bargaining requirements. Review severance plans, employment agreements, and offer letters to assess separation entitlements. And don’t forget about the federal WARN Act and the 13 state mini-WARN Acts, which require as much as 90 days’ notice for some layoffs. Once selections are made, consider whether a statistical adverse impact analysis is needed to identify risks. Prepare Older Worker Benefit Protection Act disclosures. Establish a process for how to deal with employees on leaves and visas. And confirm timing of final pay and PTO payouts, which may vary from state to state. Finally, have a clear and consis...