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Changes on the horizon for federal contractors

By Michelle Lore
Dolan Media Newswires

Minneapolis — Changes are in store in 2010 for companies that want to do business with Uncle Sam, including stepped-up enforcement of affirmative action and benefits requirements, according to a Minneapolis attorney.

The Obama administration has committed to boosting the Office of Federal Contract Compliance Programs’ 2010 budget by 33 percent and its field staff by 50 percent.

“That means that you can expect to see increased enforcement,” said David J. Goldstein. “There are going to be more frequent audits and I think the audits are going to go deeper in their inquiries. You’re just going to see an agency that is more aggressive in its enforcement measures.”

Goldstein discussed anticipated changes during a recent program, “What’s New for Federal Contractors Under the Obama Administration,” sponsored by the Hennepin County Bar Association.

Other changes on the horizon, according to Goldstein, include:

* a greater emphasis on technical compliance with affirmative action programs
* enforcement of the Internet applicant rule — the OFCCP’s rule for explaining when someone who applies online will be treated as an applicant
* continued emphasis on veterans and the disabled, particularly in the hiring process

The American Recovery and Reinvestment Act of 2009 will mean more work for the OFCCP as well, because a lot of government money has been allocated to construction projects in transportation, energy/technology, federal facilities, the environment and public schools.

“The message here is if you take our funds, you should expect to get audited,” Goldstein said. “The administration has been very clear that it’s going to closely monitor the employment practices of fund recipients.”

Relations between contractors and the OFCCP are likely to become “pricklier” going forward, Goldstein said. He said the OFCCP will focus more on technical compliance — which indicates a less tolerant view of employers — and that the agency has discontinued the Corporate Scheduling Announcement Letter, which gave employers a heads-up that certain facilities might be selected for audit.

The ARRA also includes a prevailing wage provision, which requires government contractors to pay minimum wages, overtime pay and benefits to employees working on the projects.

Along with the prevailing wage provision, recordkeeping obligations apply, including putting up posters and completing certified weekly payrolls, Goldstein said.

“The Obama administration has indicated that it is going to be very committed to enforcing the prevailing wage laws, and with that I think you can also expect the Department of Labor to also be more vigorously focusing on overtime violations and employee misclassifications,” Goldstein said.

Goldstein advised that contractors make sure they:

* determine whether these obligations apply on a particular project
* use the correct prevailing wage determination for each classification
* properly define the job classifications
* train their managers and subcontractors about prevailing wage obligations

Another area of change relates to labor relations.

Labor unions are focusing on federal contractors as organizing targets, in part because of the Obama Administration’s pro-labor stance, Goldstein said.

“Unions feel that they are poised to make some new inroads,” he said.

Goldstein said that under the Obama administration, the Department of Labor has new enforcement authority as well as a pro-union Secretary of Labor. In addition, the constitution of the National Labor Relations Board has changed and will be reviewing some of the decisions from the Bush administration.

Goldstein also predicted stepped-up enforcement in the area of immigration compliance.

“There are unprecedented levels of employer audits by the new administration,” he said. “And there is heightened scrutiny of federal contractors in this area.”

One comment

  1. Just wanted to let you know that CSAL’s have gone out in 09 to contractors. They were later than usual, but they went out. As far as I know, a decision to send them out in 2010 has not been made. Do you have any insight and that is what your comment was referencing?

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