Human Resources Update

Regulations that federal contractors need to know

Are you familiar with the Office of Federal Contract Compliance Programs, the laws it is responsible for and its federal contractor requirements? If your business has contracts with the federal government or you hope to become a federal contractor, you need to know what human resource laws and regulations you must follow. The following also apply to subcontractors of federal contractors.

I recommend you check out the OFCCP website at before you submit a bid or immediately after you have been awarded a bid. You should review your regulatory compliance and ensure you follow the requirements of this agency.

The Office of Federal Contract Compliance Programs is responsible for ensuring that businesses with federal contracts of at least $10,000 do not discriminate and that they follow affirmative action laws in hiring.

Employers must:

  • Develop a written affirmative action plan
  • Create an internal auditing and reporting system
  • Post notices of nondiscrimination and employees’ rights under OFCCP laws
  • Retain employment records
  • File an EEO-1 report with the Equal Employment Opportunity Commission
  • Allow the OFCCP access to your records during a compliance audit or complaint investigation

Federal contractors are also required to take affirmative action to hire and promote qualified veterans. You must also file a Vets 100 report, which reflects your hiring statistics, if you received a federal contract of $25,000 or more before Dec. 1, 2003, or if you received a federal contract of $100,000 or more after Dec. 1, 2003.

If you receive a federal contract, there are more laws that pertain to wages and benefits you need to be aware of. Make sure you follow the applicable laws of your contract because you want to pay employees appropriately before you begin the work.

  • Davis-Bacon and Related Acts: Requires the employer to pay em-
    ployees under the contract no less than the locally prevailing wage and fringe benefits for equivalent work on similar jobs at the location. This applies to federal contractors with contracts over $2,000 for the construction, alteration or repair of public buildings or works.
  • McNamara-O’Hara Service Contract Act: Requires the employer with a federal contract over $2,500 to pay employees no less than the prevailing wage and fringe benefits for the area or the rate of the predecessor’s collective bargaining agreement.
  • Walsh-Healey Public Contracts Act: Sets the minimum wage, maximum hours and health and safety standards for work over $10,000 that involves the manufacturing or furnishing of materials, supplies, articles or equipment to the U.S. government or the District of Columbia.
  • Copeland Anti-Kickback Act: Requires federal contractors to submit weekly reports of compliance. Federal contractors involved in building construction or repair are prevented from inducing employees to give up compensation they are entitled to under their employment agreement.
  • Executive Order 13201: Requires federal contracts to provide a notice clause to employees requiring nonexempt federal contractors to post notices to employees in-
    forming them of their rights under federal law regarding union membership and the use of union fees. This clause must be included in government contracts for contracts below the Simplified Acquisition Threshold, currently $150,000.

There may be overlap between some of the wage and hour laws, so I strongly suggest you talk to your CPA, attorney or human resources professional before you begin a project.

Federal contractors were required as of September 2009 to begin using E-Verify to electronically verify the employment eligibility of their workforce. This falls under Executive Order 12989. The service is free and allows you to electronically confirm an employee’s legal working status.

If you are a federal contractor you must post the following posters in your break room or other location where employees will see them.

  • E-Verify Poster
  • Right to Work Poster: Must also be displayed in Spanish and English.
  • Drug-Free Workplace Act
  • National Labor Relations Poster: Must be 11-by-17 inches.
  • Walsh-Healey Public Service Contracts Poster: Required by federal contractors with government service contracts of $2,500 or more, or more than $10,000 if in the manufacturing or furnishing of materials industry.
  • American Recovery and Reinvestment Act Whistleblower Rights Poster: Required by em-
    ployers receiving funding under the ARRA.
  • Department of Defense Fraud Hotline Poster: Required by em-
    ployers who have contracts with the Department of Defense of more than $5 million.
  • Department of Homeland Se-
    curity Fraud Hotline Poster: Required by employers who have contracts more than $5 million using the DHS disaster relief funds and must be posted in Spanish and English.
  • Notice to Workers with Dis-abilities/Special Minimum Wage Poster: Required by employers who receive approval from the Department of Labor to pay disabled employees a special minimum wage due to certain physical or mental impairments.
  • Davis-Bacon Act Poster: Required by contractors with any federally funded construction project for $2,000 or more for the construction or repair of public buildings or public works.
  • Department of Transportation Federal Highway Construction Poster: Required by contractors working on federally funded highway construction projects.

As you can tell, doing business with the federal government requires the employer to comply with many laws and regulations. Your business needs to implement an affirmative action plan, if required. Post your job openings with the appropriate state agency. Document your recruitment efforts to reach women, minorities, veterans and individuals with disabilities with two sources from each group. Institute an applicant tracking system. Analyze pay equity at least annually, and request race, gender and veteran status of current employees and new hires. You may also need to comply with local and state laws as part of the contract.

Federal contracts are increasingly more complex from an HR perspective. Ensure you can pass a compliance audit before you begin work, which will save you hours of time and dollars down the road.

This column provides information about the law designed to help users safely cope with their own legal needs. However, legal information is not the same as legal advice — the application of law to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurance that our information, and your interpretation of it, are appropriate to your particular situation.

Barbara Cruz Stallone, SPHR, is the owner of Stallone & Associates LLC. She is a 35-plus-year human resource professional. She was a partner with the Human Resource Umbrella LLC for 16 years before selling that company, and is a member of AGC. Suggestions for future articles or questions may be emailed to