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On September 27, 2013, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration announced interim rules in the Federal Acquisition Regulations (“FAR”) and Defense Federal Acquisition Regulations Supplement (“DFAR”) outlining enhancements to whistleblower protections for contractor employees (the “Program”).  The interim rules implement Section 828 of the National Defense Authorization Act (“NDAA”) for Fiscal Year 2013, which went into effect on July 1, 2013.  The interim rules create a four-year pilot program for executive agencies subject to the Public Contracts section of the United States Code (“Title 41 agencies”) and make extensive changes to whistleblower protection for agencies subject to the Armed Forces section of the United States Code (“Title 10 agencies”).  The interim rules also create a whistleblower exemption for portions of the intelligence community subject to the National Security Act of 1947 (“Title 50 agencies.”)

On September 26, 2013, the Department of Defense, General Services Administration and the National Aeronautics and Space Administration published a proposed rule in the Federal Register seeking to amend the Federal Acquisition Regulation (“FAR”) to implement recent mandates aimed at stemming human trafficking.  In addition to codifying the current zero-tolerance policy against human trafficking, FAR subpart 22.17 would impose additional requirements on all Government contractors and subcontractors for ensuring awareness, compliance and enforcement of this policy.

On October 1, 2013, the federal government shut down for the first time in seventeen years.  The last government shutdowns in 1995 and 1996 lasted a total of 28 days. 

Government contractors are already feeling the bite of the shutdown.  Within hours of the shutdown, government agencies and departments issued stop work orders, grinding work on government projects to a halt.  As such, government contractors are facing immediate issues regarding how to handle impacted workers while the shutdown continues and their work is on hold.

Preparation for the recent sequester familiarized government contractors with some of the issues they now face.  However, the shutdown implicates different issues than the sequester and solutions for one do not necessarily apply to the other.  With respect to the sequester, government contractors faced the possibility of canceled contracts.  In contrast, the shutdown should only result in a temporary suspension of government contracts that hopefully will be fully restored once the federal government reopens.

Contractors have been asking for input regarding how to handle employees impacted by the federal shutdown.  Although the discussion below is not comprehensive, it discusses many of the most significant employment-related issues. 

As reported in the Bloomberg BNA Daily Labor Report, three contractors were found by the California Labor Commissioner to have “willfully” violated state wage and apprenticeship laws.  The contractors were ordered to pay over $1.8 million in back wages, apprenticeship funds, fines and penalties.

The Labor Commissioner’s office, also known as the Division of Labor Standards Enforcement (DLSE), adjudicates wage claims, investigates discrimination and public works complaints and enforces state labor law.  In announcing the fines, Commissioner Julie A. Su remarked, “Let these enforcement actions serve as notice that wage theft—whether it be through nonpayment of overtime, failure to pay proper prevailing wage, underreporting of hours worked, bounced checks used to pay working people, and cheating on apprenticeship training funds—will not be tolerated in this state.”

On April 15, 2013, otherwise known as “Tax Day,” the U.S. House of Representatives unanimously passed House Resolution 882, titled the “Contracting and Tax Accountability Act of 2013.”  The bill would prohibit the government from awarding contracts and grants in excess of the simplified acquisition threshold unless the bidder certifies in writing that the individual or company does not have any “seriously delinquent tax debts.”  Importantly, rather than focus on tax debts of the company, the certification focuses on the tax debts of the individuals running the company.