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What Government Contractors Need to Know About Executive Order 13495 “Nondisplacement of Qualified Workers Under Service Contracts” Raymond L. Hogge, Jr. Hogge Law Attorneys and Counselors at Law 500 E. Plume Street, Suite 800 Norfolk, Virginia, 23510 (757) 961-5400
[email protected] This presentation is intended solely for informational purposes and is not offered as legal advice
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Overview of E.O. 13495 When a service contract succeeds a contract for performance of the same or similar services at the same location, the successor contractor is required to offer the predecessor contractor’s qualified service employees, whose employment will be terminated by the predecessor contractor, a right of first refusal of employment.
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Definitions A “service contract” is a contract or subcontract for services entered into by the Federal Government or its contractors that is covered by the Service Contracts Act of 1965.
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Definitions “Contractor” means a prime contractor and all of its first or lower tier subcontractors.
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Definitions “Service employee” means a person engaged in performance of a service contract other than a person employed in a bona fide executive, administrative or professional capacity as defined in 29 CFR Part 541.
Therefore, E.O. 13495 does not protect “managerial” and “supervisory” employees.
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Applicability E.O. 13495 applies to service contracts that succeed contracts for the same or similar service at the same location (other than those exempted or subject to a waiver).
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Exemption: Contracts Below Simplified Acquisition Threshold Contracts and subcontracts under the simplified acquisition threshold are exempt from E.O. 13495.
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Exemption: Contracts Below Simplified Acquisition Threshold If prime contract meets the simplified acquisition threshold but subcontract does not, then prime contractor is required to comply with E.O. 13495 but subcontractor is not.
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Exemption: Contracts Below Simplified Acquisition Threshold If prime contractor above threshold terminates subcontractor below threshold and takes over performance of subcontractor’s services, then prime contractor must offer employment to subcontractor’s service employees who would otherwise be displaced.
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Exemption: Contracts Under Programs for Disabled Contracts awarded under certain programs for handicapped are exempt from E.O. 13495. • Javits-Wagner-O’Day Act • Sheltered workshop employing severely disabled • Randolph-Sheppard Act
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Exemption: Federal and Nonfederal Service Contract as Part of Single Job Employees hired to work under federal and one or more nonfederal service contracts as part of single job are exempt from E.O. 13495 “provided the employees were not deployed in manner designed to avoid the purposes of” E.O. 13495.
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Agency Waivers Agency may waive some or all requirements of E.O. 13495. • Agency must make waiver determination no later than the contract solicitation date. • Agency must ensure that contractor notifies affected workers and their bargaining representatives in writing no later than 5 business days after solicitation date.
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Job Offers to Predecessor Employees “A successor contractor of subcontractor shall fill no employment openings under the contract prior to making good faith offers of employment in positions for which the employees are qualified, to those employees employed under the predecessor contract whose employment will be terminated as a result of the award of the contract or the expiration of the contract.” 29 CFR 9.12(a).
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Job Offers to Predecessor Employees Must offer “right of first refusal to employment on the contract.”
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Job Offers to Predecessor Employees Job offer may be oral or written.
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Job Offers to Predecessor Employees Job offer must state time within which offer must be accepted. Deadline for acceptance of offer cannot be less than 10 days from date of offer.
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Job Offers to Predecessor Employees Job offer must be for position for which employee is qualified.
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Job Offers to Predecessor Employees Job offer need not be for job previously held by employee at predecessor contractor.
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Job Offers to Predecessor Employees Job offer may be under different terms and conditions, including pay and benefits, as job held with predecessor contracts, provided reasons for difference is not related to a desire that the employee refuse the offer or that other employees be hired for the job.
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Job Offers to Predecessor Employees Determinations of predecessor employee qualification for job offer must be based on employee’s educational and employment history, with particular emphasis on experience on predecessor contract.
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Job Offers to Predecessor Employees Determinations of predecessor employee qualification for job offer must be based on credible information provided by a knowledgeable source such as the predecessor contractor, the local supervisor, the employee, or the contracting agency.
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Job Offers to Predecessor Employees Determinations of predecessor employee qualification for job offer may be based on preemployment screening processes such as drug tests, background checks, and security clearance checks only if the processes are (1) provided for by the contracting agency , (2) conditions of the service contract, and (3) “consistent with” E.O. 13495.
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Job Offers to Predecessor Employees Predecessor employee’s eligibility for job offer usually will be based on the predecessor contractor’s certified list of service employees working under predecessor contract and subcontracts during last month (30 days) of contract performance.
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Job Offers to Predecessor Employees In determining successor employee eligibility for job offer, successor contracts must accept credible evidence other than predecessor contractor’s certified list of service employees. • E.g.: Employee’s claim of assignment to work on contract, verified by contracting agency staff. • E.g.: Employee pay stub showing date and location of work.
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Job Offers to Predecessor Employees Successor contractor must make job offers even if successor contractor has not been provided a list of the predecessor contractor’s employees, and even if the list does not contain the names of all persons employed by predecessor contractor during the final month of contract performance.
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Job Offers to Predecessor Employees Job offers must be “good faith” and “bona fide.”
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Job Offers to Predecessor Employees Offer presumed to be bona fide • even if it is not for a position similar to one employee previously held • even if subject to different pay and benefits
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Exception for Jobs Held By Successor Employees Successor contractor may employ any of its current service employees who (1) have worked for successor for at least 3 months immediately preceding commencement of successor contract; and (2) would otherwise face layoff or discharge.
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Exception for Employee Retained by Predecessor Nor required to make job offer to predecessor service employee who will be retained by the predecessor contractor.
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Exception for Employee Retained by Predecessor Successor contractor must presume all predecessor service employees working on contract will be terminated unless successor contractor can demonstrate reasonable belief to the contrary based on credible information from a knowledgeable source such as the predecessor or the employee.
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Exception for Employee Retained by Predecessor Successor contractor must presume all predecessor employees working on contract are service employees unless successor contractor can demonstrate reasonable belief to the contrary based on credible information from a knowledgeable source such as the predecessor, the employee, or the contracting agency. • Knowledge of general business practices of predecessor or industry not sufficient.
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Exception for Employee With Unsuitable Performance Record Not required to make job offer to predecessor employee who successor contractor reasonably believes, based on employee’s past performance, has failed to perform suitably on the job.
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Exception for Employee With Unsuitable Performance Record Successor must presume that all predecessor employees working on last month of contract performed suitable work.
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Exception for Employee With Unsuitable Performance Record To deny offer based on unsuitable performance, successor must be able to demonstrate a reasonable belief of unsuitable performance by the employee based on written credible information provided by a knowledgable source such as predecessor contractor and subcontractors, local supervisor, the employee, or the contracting agency.
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Reduced Staffing Successor contractor may employ fewer service employees than predecessor for the contract.
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Reduced Staffing Successor contractor must offer employment only to number of predecessor employees which success reasonably believes necessary to meet anticipated staffing pattern.
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Reduced Staffing Where successor contractor does not initially offer employment to all predecessor employees, the obligation to offer employment to the remaining predecessor employees continues for 90 days after successor begins performance of contract.
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Certified Service Employee Lists Not less than 30 days before predecessor contractor completes contract, predecessor must provide contracting officer a certified list of names and anniversary dates of all service employees working under contract and subcontracts (same as seniority list info under Service Contract Act regs 48 CFR 52.222-46).
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Certified Service Employee Lists If predecessor workforce changes after 30 day list submitted, then predecessor must submit to contracting office a revised service employee list not less than 10 days before completing performance on contract.
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Certified Service Employee Lists Upon receipt of 30/10 day service employee list from predecessor, contracting officer provides list to successor contractor and, if requested, to predecessor employees or their representative.
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Notification to Predecessor Contractor and Employees Contracting officer directs predecessor contractor to provide written notice to predecessor employees of possible right to offer of employment from successor contractor. A form notice is provided in 29 CFR Chapter 9 Appendix B.
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Notification to Predecessor Contractor and Employees Notice must be • posted in a conspicuous place at worksite; or • delivered to employees individually.
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Notification to Predecessor Contractor and Employees If notice is delivered to employees by e-mail, it must result in electronic delivery receipt or some other reliable conformation of delivery.
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Notification to Predecessor Contractor and Employees Where a significant portion of predecessor workforce is not fluent in English, the notice must be provided in English and the language(s) spoken by the employees.
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Notification to Predecessor Contractor and Employees Multiple foreign language notices are required where significant portions of the workforce speak different foreign languages and there is no common language.
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Recordkeeping No particular form of records required, i.e., paper or electronic.
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Recordkeeping Contractor must maintain copies of all written job offers.
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Recordkeeping Contractor must maintain contemporaneous written record of all oral job offers, including: • Date, location, and attendance roster of any employee meetings at which offers were made • Summary of each meeting • Copy of any written notice of the meeting • Names of all employees to whom offers made
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Recordkeeping Contractor must maintain copy of any record that forms basis for any claimed exclusion or exemption.
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Recordkeeping Contractor must maintain copy of the employee list received from the contracting agency.
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Recordkeeping Contractor must retain required records for not less than 3 years from date records were created.
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To obtain a complementary copy of this presentation, or for assistance in complying with Executive Order 13495, please contact Ray Hogge at (757) 961-5400 or at
[email protected]
