Government Contractor Compliance & Regulatory Update

Federal Government Confirms It Is Currently Not Enforcing Contractor COVID-19 Requirements

Following up on two recent federal court decisions (discussed here and here) enjoining the enforcement of the contractor vaccine mandate, the Office of Management and Budget (“OMB”) has issued guidance, posted on the Safer Federal Workforce Task Force’s (“Task Force”) website, regarding the federal government’s response to those decisions.

The guidance provides that “The Government will take no action to enforce the clause implementing requirements of Executive Order 14042, absent further written notice from the agency, where the place of performance identified in the contract is in a U.S. state or outlying area subject to a court order prohibiting the application of requirements pursuant to the Executive Order (hereinafter, “Excluded State or Outlying Area”).”  The guidance further states that currently Excluded States and Outlying Areas include the entire country and all of its territories, but this may change if the injunctions are lifted or modified.

Notably, although the court orders enjoining enforcement focused solely on the vaccine mandate portion of the Task Force’s requirements issued pursuant to Executive Order 14042, OMB’s statement indicates no portion of the contractor requirements (such as the mask requirement) will be enforced.

The full text of the announcement is provided below.

Regarding Applicable Court Orders and Injunctions: The Office of Management and Budget has issued guidance on implementing requirements of Executive Order 14042 while ensuring compliance with applicable court orders and injunctions, including those that are preliminary and may be supplemented, modified, or vacated, depending on the course of ongoing litigation.

  • For existing contracts or contract-like instruments (hereinafter “contracts”) that contain a clause implementing requirements of Executive Order 14042:The Government will take no action to enforce the clause implementing requirements of Executive Order 14042, absent further written notice from the agency, where the place of performance identified in the contract is in a U.S. state or outlying area subject to a court order prohibiting the application of requirements pursuant to the Executive Order (hereinafter, “Excluded State or Outlying Area”). In all other circumstances, the Government will enforce the clause, except for contractor employees who perform substantial work on or in connection with a covered contract in an Excluded State or Outlying Area, or in a covered contractor workplace located in an Excluded State or Outlying Area.
  • Currently Excluded States and Outlying Areas: All of the United States and its outlying areas, including:
    • The fifty States;
    • The District of Columbia;
    • The commonwealths of Puerto Rico and the Northern Mariana Islands;
    • The territories of American Samoa, Guam, and the United States Virgin Islands; and
    • The minor outlying islands of Baker Island, Howland Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Islands, Navassa Island, Palmyra Atoll, and Wake Atoll.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns.  Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

Contractor Vaccine Mandate Blocked Nationwide

UPDATE (01/04): On December 22, a Federal judge in Florida became the latest judge to issue a preliminary injunction halting enforcement of the federal contractor and subcontractor vaccine mandate requirements.  The decision in State of Florida v. Nelson, et al. blocks enforcement only in Florida, but Judge R. Stan Baker’s order (discussed below) in State of Georgia, et al. v. President of the United States, et al. blocking enforcement nationwide remains in effect.  The Federal government has appealed that decision to the Eleventh Circuit and the Eleventh Circuit has declined to stay Judge Baker’s order during that appeal. Briefing on the appeal will not be completed until the end of January.

UPDATE: On December 9, attorneys for the Justice Department appealed the nationwide injunction to the Eleventh Circuit.  We will continue to provide updates as the situation develops.

On December 7, 2021, a federal judge issued a nationwide preliminary injunction halting enforcement of the federal contractor and subcontractor vaccine mandate requirements issued by the Safer Federal Workforce Task Force in response to President Biden’s Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors.  The mandate requires covered contractor employees to be fully vaccinated by January 18, 2022.  On November 30, a federal judge in Kentucky blocked enforcement of the mandate in Kentucky, Ohio, and Tennessee.  We blogged about that decision here.

Judge R. Stan Baker’s decision came in a case originally filed by Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia, the governors of several of those states, and various state agencies, including the Board of Regents of the University System of Georgia.  Later, the Associate Builders and Contractors, Inc. (“ABC”), a trade organization, and one of its chapters in Georgia filed a Motion to Intervene along with their own Motion for Preliminary Injunction.  Judge Baker denied the Motion to Intervene as to the local chapter, but granted the Motion to Intervene as to ABC.  As discussed below, the Judge then found that the inclusion of this additional plaintiff warranted issuing a nationwide injunction (as opposed to the Kentucky judge’s more limited Order).

As in the Kentucky case, Judge Baker found the Plaintiffs would likely be able to show that the mandate exceeds the President’s powers under the Federal Property and Administrative Services Act.  He declined to issue a decision as to whether the mandate likely violated the constitutional non-delegation doctrine or infringed on rights reserved to the states under the Tenth Amendment.

As to why the Court here issued a nationwide injunction, Judge Baker cited the inclusion of ABC, contending that the trade association had members “all over the country” and were awarded “57% of federal contracts exceeding $25 million during fiscal years 2009-2020.”  His injunction does not appear to apply to other aspects of the contractor COVID-19 requirements issued by the Task Force, including those related to masking and social distancing.

It is unclear whether the federal government will seek to have the injunction lifted, and whether such an effort will be successful.  But, effective immediately, covered contractors in any state or territory of the United States of America are no longer mandated to require their covered workers to be vaccinated.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns.  Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

OFCCP Launches Contractor Portal Initiating AAP Verification Program

On December 2, 2021, OFCCP announced the launch of its new “Contractor Portal,” which “[c]overed federal contractors and subcontractors (“contractors”) must use … to certify, on an annual basis, whether they have developed and maintained an affirmative action program for each establishment and/or functional unit, as applicable.”  The Contractor Portal will also serve as a “secure portal for scheduled contractors to submit to OFCCP their Affirmative Action Program(s) during compliance evaluations.”  This development has been years in the making, initiated by a 2016 GAO report criticizing OFCCP for having no process for ensuring contractors were preparing their affirmative action programs (“AAPs”) annually, and comes over three years after former Director Craig Leen announced OFCCP’s intention to create an AAP verification program.

The announcement sets forth key dates for registration and AAP certification:

On Feb. 1, 2022, contractors may begin registering for access to the portal. OFCCP will also send an e-mail to each covered federal contractor in its jurisdiction whose email information is available in its system inviting them to register.

On March 31, 2022, contractors will be able to utilize the certification feature in the portal to certify their AAP compliance.

By June 30, 2022, existing contractors must certify whether they have developed and maintained an affirmative action program for each establishment and/or functional unit, as applicable.

Contractors can access the portal here.  OFCCP has also created a FAQ page regarding the portal.  There, OFCCP explains:

  • Supply and service contractors who meet the thresholds for having AAPs will be required to use the portal: “Specifically, contractors that hold a contract of $50,000 or more and employ 50 or more employees must develop and maintain AAPs pursuant to Executive Order 11246 and Section 503 of the Rehabilitation Act of 1973. If a contractor has at least 50 employees and a contract of $150,000 or more, then it must also develop an AAP pursuant to the Vietnam Era Veterans’ Readjustment Assistance Act of 1974.”
  • At this time, construction contractors who are not also supply and service contractors are not required to use the portal or certify AAP compliance.
  • Certifying AAP compliance will not exempt contractors from OFCCP compliance evaluations.

OFCCP promises more information will come out in the coming months.  Among questions we have are:  (a) what will contractors actually be required to certify with regard to their AAPs?; (b) will failure to certify increase the likelihood of being selected for a compliance evaluation?; and (c) which AAP years will be subject to the June 30, 2022 deadline, and how will OFCCP address contractors who have non-calendar AAP years?

Contractors who have been less than diligent with their AAP preparation should begin now to ensure they have compliant AAPs as soon as possible.

We will continue to monitor and report on this significant development.

Vaccination Deadline for Contractors Extended to January 18, 2022

Federal government contractors and subcontractors have been dealing with a steady stream of new FAQs and details regarding the COVID-19 safety requirements for federal contractors and subcontractors first announced by President Biden’s Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, and then issued by the Safer Federal Workforce Task Force (the “Task Force”). Our prior postings on all of those developments can be found hereherehere, here, and here.

On November 10, 2021, the Task Force issued updated Guidance and new FAQs regarding the COVID-19 requirements. As previously reported, a White House Fact Sheet issued on November 4, 2021 indicated that the December 8, 2021 deadline for covered contractor and subcontractor employees to be fully vaccinated would be extended. The updated Guidance issued on November 10, 2021 formally extends that deadline providing: “Covered contractor employees must be fully vaccinated no later than January 18, 2022.” This means covered contractor and subcontractor employees must receive their second dose of the Pfizer or Moderna vaccine, or single dose of Johnson & Johnson vaccine by January 4, 2022.

The Task Force also issued new and updated FAQs regarding the requirements. These include:

  • Announcing the availability of sample signage that contractors and subcontractors can post at entrances to announce safety requirements at their worksites.
  • Clarifying that when a covered contractor or subcontractor employee works at a federal government worksite (as opposed to working at home or at the contractor/subcontractor’s facility), the employee must still abide by the Guidance’s requirements.

We will continue to monitor and update our readers on new developments regarding the Task Force’s Guidance.

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Subscribe to Proskauer’s Law and the Workplace blog to stay current on the latest Biden administration developments impacting your business. Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

OFCCP Publishes Proposal to Rescind Religious Exemption Rule

As a follow up to yesterday’s announcement, OFCCP published its proposal to rescind the “Implementing Legal Requirements Regarding the Equal Employment Opportunity Clause’s Religious Exemption” rule (the “Religious Exemption Rule”) today. The Religious Exemption Rule expanded the existing exemption on religious entities’ compliance with the anti-discrimination provisions of Executive Order 11246.

OFCCP contends that the Religious Exemption Rule, which was enacted during the prior administration, “create[d] a lack of clarity regarding the scope and application of the exemption because… it misstate[d] the law in key respects.” In its proposal, OFCCP lists a number of ways in which the Religious Exemption Rule departs from Title VII principles and “long-standing policy” regarding equal employment opportunity. OFCCP reasons that these inconsistencies “likely … increase[d] rather than decrease[d] confusion about the application of the Executive Order 11246 religious exemption.”

The OFCCP further explains that it will not be modifying or replacing the Religious Exemption Rule because it “has no effect on the overwhelming majority of federal contractors” – only impacting those that meet the statutory definition of a “religious corporation, association, educational institution, or society” – and therefore, in the agency’s view, “is unnecessary.” Instead, the agency will revert to its previous approach of interpreting applicable “Title VII principles and applicable law.” OFCCP acknowledged that while there is a lack of uniformity among courts in the approach they use in religious exemption cases, relevant Title VII factors are clearly identified and should be weighed as a balancing test on a case-by-case basis.

Comments on the proposal can be submitted through December 9, 2021.

OFCCP Announces Proposal to Rescind Religious Exemption Rule

The Office of Federal Contract Compliance Programs (“OFCCP”) announced today a proposal to rescind the rule titled “Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption,” which has been in effect since January 8, 2021 (the “Religious Exemption Rule”).  The Religious Exemption Rule clarified the scope and application of the religious exemption contained in Executive Order 11246, which is enforced by OFCCP.  Our summary of the Religious Exemption Rule can be found here.

In a news release, OFCCP Director Jenny Yang explained the proposed rescission will preserve the Executive Order’s religious exemption, and result in a “return to [the] policy and practice of considering the facts of each case and applying Title VII principles and case law and other applicable law.” OFCCP justified the rescission of the Religious Exemption Rule because it “departed from OFCCP’s long-standing policy and practice of applying Title VII principles and case law to interpret the exemption.”

The proposal will be published on November 9, 2021.

Contractor Vaccine Mandate Deadline Will Be Extended to January 4, 2022

Today, the Biden Administration issued a Fact Sheet related to the new OSHA emergency temporary standard (“ETS”) requiring vaccination or masking for employers with more than 100 employees and the new Centers for Medicare and Medicaid Services requirement that health care workers at facilities participating in Medicare and Medicaid are fully vaccinated (the “CMS rule”).  In that statement, the Administration indicated that to assist contractors who may be subject to the contractor vaccine mandate (which has no testing option) and the new OSHA ETS and/or CMS rule standard at different facilities, it will be extending the vaccine mandate previously issued for federal contractors to January 4, 2022.  The Safer Federal Workforce Task Force (“Task Force”) Guidelines had previously set a December 8, 2021 deadline for employees to be vaccinated.

The Fact Sheet states:

Federal contractors may have some workplaces subject to requirements for federal contractors and other workplaces subject to the newly-released COVID-19 Vaccination and Testing ETS. To make it easy for all employers to comply with the requirements, the deadline for the federal contractor vaccination requirement will be aligned with those for the CMS rule and the ETS. Employees falling under the ETS, CMS, or federal contractor rules will need to have their final vaccination dose – either their second dose of Pfizer or Moderna, or single dose of Johnson & Johnson – by January 4, 2022. This will make it easier for employers to ensure their workforce is vaccinated, safe, and healthy, and ensure that federal contractors implement their requirements on the same timeline as other employers in their industries. And, the newly-released ETS will not be applied to workplaces subject to the federal contractor requirement or CMS rule, so employers will not have to track multiple vaccination requirements for the same employees.

Our prior discussion of the Task Force’s Guidelines are available herehere, here, and here.

We will continue to monitor and update our readers on these critical issues.

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Subscribe to Proskauer’s Law and the Workplace blog to stay current on the latest Biden administration developments impacting your business. Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

Task Force Signals Flexibility On Contractor Vaccination Mandate In New FAQs

Federal government contractors and subcontractors have been scrambling for weeks to try to digest and implement the COVID-19 safety measures issued by the Safer Federal Workforce Task Force (the “Task Force”) in the wake of the Biden Administration’s Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors.  Our prior analysis of the Task Force’s Guidelines are available here, here, and here.  On November 1, 2021, the Task Force issued additional guidance on some key questions with which contractors have been grappling.

As previously reported, among other things, the Task Force’s Guidelines require contractors to have their employees who work on or in connection with covered contracts, and those who work with them in contractor facilities, vaccinated by December 8, 2021.  Since the Guidelines were issued, government agencies have been issuing contract modification notices and incorporating the new requirements into existing contracts. Simultaneously, contractors have been trying to determine how to comply with the December 8, 2021 deadline and what to do with employees who will not be vaccinated by that date or who refuse to be vaccinated.

The Task Force’s November 1, 2021 guidance suggests the federal government does not view December 8, 2021 as an absolute deadline, but rather as an aspirational one – provided that contractors are making “good faith” attempts to comply.  That being said, absent good faith efforts, agencies are directed to consider contractual remedies.  Specifically, in a new FAQ, the Task Force provides:

Covered contractors are expected to comply with all requirements set forth in their contract.  Where covered contractors are working in good faith and encounter challenges with compliance with COVID-19 workplace safety protocols, the agency contracting officer should work with them to address these challenges.  If a covered contractor is not taking steps to comply, significant actions, such as termination of the contract, should be taken.

This is consistent with remarks made at an October 27, 2021 press briefing by Jeff Zients, the White House Coronavirus Response Coordinator.  Specifically, Mr. Zients stated:

The other piece of this is that vaccination requirements for federal workers and contractors — there are still weeks until we reach those deadlines. And it’s important to remember that those deadlines are not cliffs. The federal worker deadline is the 22nd of November, and the federal contractor deadline is not until December [8th].

But even once we hit those deadlines, we expect federal agencies and contractors will follow their standard HR processes and that, for any of the probably relatively small percent of employees that are not in compliance, they’ll go through education, counseling, accommodations, and then enforcement.

So, these processes play out across weeks, not days. And so, to be clear, we’re creating flexibility within the system. We’re offering people multiple opportunities to get vaccinated. There is not a cliff here.

And the purpose, I think, most importantly, is to get people vaccinated and protected, not to punish them. So, we do not expect any disruptions.

Further, the Task Force recognizes addressing accommodation requests may take time and do not have to be completed before December 8, 2021.  In another FAQ, the Task Force explains:

The covered contractor may still be reviewing requests for accommodation as of the time that covered contractor employees begin work on a covered contract or at a covered workplace.  While accommodation requests are pending, the covered contractor must require a covered contractor employee with a pending accommodation request to follow workplace safety protocols for individuals who are not fully vaccinated as specified in the Task Force Guidance for Federal Contractors and Subcontractors.

The Task Force also provided guidance for how contractors should handle employees who refuse to get vaccinated for reasons other than religious beliefs or disability/medical accommodations.  The new FAQ provides that contractors “should determine the appropriate means of enforcement with respect to [such] employees,” which “may include … using its usual processes for enforcement of workplace policies, such as those addressed in the contractor’s employee handbook or collective bargaining agreements.”  It further suggests that contractors consider the federal government’s approach to such employee resistance, which “encourages compliance, including through a limited period of counseling and education, followed by additional disciplinary measures if necessary.  Removal occurs only after continued noncompliance.”

The new publication also provides some clarity around what constitutes a “covered contractor workplace.”  The Guidelines define “covered contractor workplace,” as one which is “controlled by a covered contractor at which any employee of a covered contractor working on or in connection with a covered contract is likely to be present during the period of performance for a covered contract.”  All employees who work at a covered contractor workplace are subject to the Guidelines’ vaccine, masking, and social distancing requirements. The FAQs addressed the “control” aspect of the definition, and whether a workplace controlled by a contractor’s affiliate can be a “covered contractor workplace.”  The FAQs provide that “[i]f any employee of a covered contractor working on or in connection with a covered contract is likely to be present during the period of performance for a covered contract at a workplace controlled by a corporate affiliate of that covered contractor, that workplace is considered a covered contractor workplace.”  In turn, the FAQ states that “business concerns, organizations, or individuals are affiliates of each other if, directly or indirectly: (i) either one controls or has the power to control the other; or (ii) a third party controls or has the power to control both.  Indicia of control include, but are not limited to, interlocking management or ownership, identity of interests among family members, shared facilities and equipment, or common use of employees.”

These FAQs provide some helpful and welcome guidance for contractors struggling with how to comply with the Guidelines.  We will continue to report on new developments.

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Subscribe to Proskauer’s Law and the Workplace blog to stay current on the latest Biden administration developments impacting your business. Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

Task Force Issues Additional FAQs on Vaccinations for Contractors

The Safer Federal Workforce Task Force (the “Task Force”) has released additional frequently asked questions and answers (“FAQs”) regarding its Guidance for Federal Contractors and Subcontractors on implementing COVID-19 safety measures in accordance with Executive Order 14042. Our prior posts on the Guidance and previously-issued FAQs can be found here and here.

A summary of the key information provided in the new FAQs is below. This information is significant, as contractors and subcontractors who have contracts or contract-like instruments incorporating the applicable clause are subject not only to the Guidelines but also the information conveyed through the Task Force’s FAQs.

  • Timeline for Vaccination After Denial of Accommodation Request. The latest FAQs provide that where an employee requests and is denied an accommodation, the contractor “should establish a timeline for a covered contractor employee … to promptly become fully vaccinated.”
  • Vaccination Delays Due to Medical Condition. The Task Force provides that where an employee requests a delay in becoming vaccinated due to a medical condition – as opposed to a disability – covered contractors “in some limited circumstances … may grant the contractor employee an extension to a vaccination deadline based upon other medical considerations.” The FAQs indicate such decisions should be based on “documented medical reasons” and “contractors should specify, consistent with the nature of the medical necessity, by what date the contractor employee must be fully vaccinated.” The FAQs note certain medical conditions for which the CDC has recommended to delay vaccination. If a vaccination delay accommodation is granted, the unvaccinated employee must follow all applicable face covering and physical distancing protocols for individuals who are not fully vaccinated.
  • Other Topics. The new FAQs also contain a number of questions and answers directing contractors to CDC guidance on a variety of vaccination-related issues, including pregnancy, contraindications, and clinical trials.

We will continue to monitor developments in this space and report on them here.

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Subscribe to Proskauer’s Law and the Workplace blog to stay current on the latest Biden administration developments impacting your business. Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

FAR Council Issues Contractor Vaccination Contract Clause and Guidance

As previously reported, the Biden Administration issued Executive Order 14042 (“the Order”) last month.  The Order requires, in part, that the Federal Acquisition Regulatory Council (“the FAR Council”) amend the Federal Acquisition Regulation (“FAR”) to include a clause specifying that contractors and subcontractors shall “comply with all guidance for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force.”  The Task Force issued its COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors (the “Guidance”) on September 24, 2021, setting forth vaccine mandates, as well as masking, social distancing, and other requirements.  The Task Force then supplemented its Guidance with published FAQs on September 30, 2021.  Our summaries of these developments are available here and here.

The FAR Council has now issued the contract clause that, when included in new contracts and contract-like instruments, will impose the Guidance’s requirements on contractors and subcontractors, as well as a memorandum providing guidance to agencies regarding its implementation.  The new clause and memorandum to agencies are available here.  They provide additional insights on the recent federal mandate.

As we previously reported, despite the fact the Order limits the contracts subject to the Guidance, the Guidance strongly encourages agencies to include the clause in contracts and contract-like instruments beyond those expressly covered by the Order.  The FAR Council’s memorandum echoes this sentiment, noting it is part of an effort “[t]o maximize the goal of getting more people vaccinated and decrease the spread of COVID-19.”  To that end, agencies are advised that the clause should be broadly applied, with only two exceptions: (1) “contracts and subcontracts with Indian Tribes under the Indian Self-Determination and Education Assistance Act;” and (2) “solicitations and contracts if performance is outside the United States or its outlying areas.”

The FAR Council also provides information regarding the applicability and effective dates of the clause as follows:

  • “new contracts awarded on or after November 14 from solicitations issued before October 15 (this includes new orders awarded on or after November 14 from solicitations issued before October 15 under existing indefinite-delivery contracts);
  • new solicitations issued on or after October 15 and contracts awarded pursuant to those solicitations (this includes new solicitations issued on or after October 15 for orders awarded pursuant to those solicitations under existing indefinite-delivery contracts);
  • extensions or renewals of existing contracts and orders awarded on or after October 15, 2021; and
  • options on existing contracts and orders exercised on or after October 15, 2021.”

The actual clause published by the FAR Council is also informative.  It provides that contractors with contracts containing the clause need to comply not only with the Guidance itself, but also “shall comply with all guidance, including guidance conveyed through Frequently Asked Questions, as amended during the performance of this contract, for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force (Task Force Guidance) at https:/www.saferfederalworkforce.gov/contractors/.” (emphasis added).

We will continue to report on new developments regarding the Order and Guidance.

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Subscribe to Proskauer’s Law and the Workplace blog to stay current on the latest Biden administration developments impacting your business. Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

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