Tag: Federal

  • U.S. Appeals Court Overturns $15 Minimum Wage for Federal Contractors

    U.S. Appeals Court Overturns $15 Minimum Wage for Federal Contractors

    by CUPA-HR | November 12, 2024

    On November 5, the 9th U.S. Circuit Court of Appeals reversed a lower district court’s decision to dismiss a lawsuit challenging the Biden administration’s executive order and the Department of Labor (DOL)’s final rule to increase the minimum wage for federal contractors. The ruling orders the legal challenge to proceed, which could ultimately strike down the executive order and final rule.

    In April 2021, the Biden administration published executive order 14026, which directed DOL to issue regulations to increase the minimum wage for federal contractors to $15 per hour beginning on January 30, 2022. Subsequently, in November 2021, DOL issued its final rule to implement the executive order, setting the minimum wage for federal contractors to $15 per hour on January 30, 2022, and requiring the secretary of Labor to annually review and determine the minimum wage amount beginning in January 2023.

    The executive order and final rule were challenged by five states: Arizona, Idaho, Indiana, Nebraska and South Carolina. In their suit, the states claimed that the Biden administration violated the Federal Property and Administrative Services Act (FPASA) and exceeded its authority granted under the law by imposing a wage mandate through an executive order. They also argued that DOL violated the Administrative Procedure Act (APA), which governs how federal agencies proceed through the notice-and-comment rulemaking process, when implementing the final rule. The lawsuit was originally dismissed by a federal judge in the U.S. District Court of Arizona, leading the states to appeal to the 9th Circuit.

    In the 9th Circuit’s ruling, two of the three judges on the panel sided with the states’ arguments, reversing the dismissal of the case from the lower district court. The majority opinion held that the minimum wage mandate exceeded the president’s authority under FPASA and that DOL’s final rule was subject to arbitrary-or-capricious review under the APA. As such, the circuit court sends the case back to the district court, where the federal judge will proceed with the case and issue a further ruling to uphold or strike down the executive order and final rule. For now, the order and final rule are still in place, but the future of both is uncertain. CUPA-HR will keep members apprised of any updates related to this lawsuit and further laws and regulations impacting federal contractors.

     

     



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  • Federal Judges Block Title IX Rule in 10 States – CUPA-HR

    Federal Judges Block Title IX Rule in 10 States – CUPA-HR

    by CUPA-HR | June 17, 2024

    Updates:
    On June 17, a federal judge in the Eastern District Court of Kentucky issued a second preliminary injunction against the Title IX rule, blocking the final rule from taking effect on August 1 in Virginia, Kentucky, Tennessee, Indiana, Ohio and West Virginia.

    On June 24, the Biden administration filed a notice of appeal for the preliminary injunction granted in the Western District Court of Louisiana to block the Title IX final rule from going into effect on August 1, 2024. The appeal will be filed in the 5th U.S. Circuit Court of Appeals. The preliminary injunction remains in effect until the 5th Circuit Court issues a decision. CUPA-HR will keep members apprised of any updates on this appeal as well as the status of the second preliminary injunction granted in the Eastern District Court of Kentucky.

    On July 2, a federal judge in the U.S. District Court of Kansas issued a third preliminary injunction to block the Biden administration’s Title IX rule from taking effect on August 1. The preliminary injunction applies to four states: Alaska, Kansas, Utah and Wyoming. The preliminary injunction also applies to schools where members of the Young America’s Foundation, Female Athletes United, and Moms for Liberty attend, even if the state in which the school is located is not challenging the rule or is not included in another preliminary injunction. The Title IX rule is now blocked from being enforced beginning on August 1 in a total of 14 states, as well as over 360 institutions in 24 states, Washington D.C., and Puerto Rico that are not suing the Biden administration over the Title IX rule.

    On July 11, Republicans in the U.S. House of Representatives passed a Congressional Review Act resolution to block the Department of Education from implementing and enforcing its Title IX final rule. The vote is largely symbolic as the Democrat-controlled Senate is unlikely to take up the measure and President Biden would veto the resolution if it ended up on his desk.

    On July 11, a federal judge in the Northern District Court of Texas granted a fourth preliminary injunction to block the Title IX final rule from taking effect on August 1 in the state of Texas. The Title IX final rule is now blocked from taking effect in 15 states.

    On July 24, a federal judge from the Eastern District Court of Missouri issued another preliminary injunction to block the Title IX rule from taking effect in six more states. The states included in this decision were Arkansas, Missouri, Iowa, Nebraska, North Dakota, and South Dakota. The Title IX final rule is now blocked from taking effect on August 1 in a total of 21 states.

    On July 31, a federal judge in the Western District Court of Oklahoma granted a preliminary injunction to block the Title IX final rule from taking effect on August 1. Additionally, the 11th U.S. Circuit Court of Appeals granted a preliminary injunction in Alabama, Florida, Georgia, and South Carolina, overturning a lower court’s previous decision to deny the preliminary injunction in those states. There are 26 states in which the Title IX rule is now blocked from taking effect on August 1.


    On June 13, a federal judge in the Western District Court of Louisiana issued a preliminary injunction on the Department of Education (ED)’s recent Title IX final rule. The order blocks the final rule from taking effect on August 1 in Louisiana, Mississippi, Montana and Idaho until a final decision has been issued by the judge on a lawsuit challenging the validity of the final rule.

    ED’s Final Rule and Subsequent Lawsuits

    In April, ED released its highly anticipated final rule to amend the Title IX regulations. Notably, the final rule expands protections against sex-based discrimination to cover sexual orientation, gender identity, and pregnancy or related conditions. Soon after it was published, several lawsuits were filed by states and advocacy groups challenging ED’s decision to expand Title IX protections to include gender identity and sexual orientation. 

    Judge’s Order

    In the order to grant a preliminary injunction, the federal judge asserted that the Title IX rulemaking is “contrary to law” and “exceeds statutory authority,” especially with the expanded protections for transgender students. Specifically, the judge explained that Congress intended to protect biological women from discrimination when enacting Title IX, and that “enacting the changes in the final rule would subvert the original purpose of Title IX.”

    As a result, ED is blocked from enforcing the final rule in the four states listed in the order, and the final rule will not take effect on August 1 in those four states until further orders are issued by the court.* The judge will now consider the lawsuit challenging the final rule and decide to either uphold or strike down the rule. A final decision may take months or a year or more to be released, as any decision is likely to be appealed to a higher court. In the meantime, CUPA-HR encourages HR leaders in the states impacted by this preliminary to work with their institution’s general counsel on best practices for navigating Title IX compliance.

    CUPA-HR will keep members apprised of additional updates on the legal challenges against the Title IX final rule.


    * Over two dozen states have joined lawsuits challenging the Title IX final rule. Though the order in this blog post applies only to Louisiana, Mississippi, Montana and Idaho, decisions for the additional lawsuits could result in similar injunctions for other states.



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  • Overtime Rule Challenged in Federal Court – CUPA-HR

    Overtime Rule Challenged in Federal Court – CUPA-HR

    by CUPA-HR | May 23, 2024

    On May 23, a group of 13 local and national associations and Texas businesses filed suit in federal court in Texas, challenging the U.S. Department of Labor’s rule setting new minimum salary thresholds for the white collar overtime pay exemptions under the Fair Labor Standards Act (FLSA).

    The final rule of April 23, 2024 increases the minimum salary threshold to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025. The rule also implements automatic updates to the threshold that will occur every three years. The suit claims that the salary threshold that goes into effect on January 1, 2025, is so high it will result in more than 4 million individuals being denied exempt status, even though these individuals could be reasonably classified as exempt based on their duties, and in doing so, the rule violates both the statutory language of the FLSA and prior court decisions. The suit also challenges the automatic updates.

    The following are plaintiffs in the case: Plano Chamber of Commerce, American Hotel and Lodging Association, Associated Builders and Contractors, International Franchise Association, National Association of Convenience Stores, National Association of Home Builders, National Association of Wholesaler-Distributors, National Federation of Independent Business, National Retail Federation, Restaurant Law Center, Texas Restaurant Association, Cooper General Contractors and Dase Blinds.

    CUPA-HR will be following the case closely and provide you with regular updates.



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  • Federal Judge Blocks NCAA Name, Image and Likeness Policy for Recruits Nationwide – CUPA-HR

    Federal Judge Blocks NCAA Name, Image and Likeness Policy for Recruits Nationwide – CUPA-HR

    by CUPA-HR | February 27, 2024

    On February 23, a federal judge with the District Court for the Eastern District of Tennessee issued a preliminary injunction barring the NCAA from enforcing its rules prohibiting name, image and likeness compensation for recruits. The injunction applies nationwide.

    The policy in question prohibited student-athletes from negotiating and signing NIL contracts prior to enrolling at a college or university. This meant NIL compensation could not be used to “induce” a recruit to a specific school. This policy stood in contrast to the NCAA’s policy for student-athletes already enrolled at a college or university, who, as of 2021, have been allowed to seek NIL compensation.

    In his decision, U.S. District Judge Clifton Corker explained, “The NCAA’s prohibition likely violates federal antitrust law and harms student-athletes.” He clarified, “Without the give and take of a free market, student-athletes simply have no knowledge of their true NIL value. It is this suppression of negotiating leverage and the consequential lack of knowledge that harms student-athletes.” He further argued that the NCAA “fails to show how the timing of when a student-athlete enters such an agreement would destroy the goal of preserving amateurism,” thereby not establishing rationale for treating recruits differently than enrolled student-athletes.

    The lawsuit was filed by the attorneys general of Tennessee and Virginia after the NCAA investigated the University of Tennessee for potential violations of the policy. The NCAA will likely appeal the case to the 6th U.S. Circuit Court of Appeals overseeing Tennessee, Kentucky, Ohio and Michigan, but in the meantime, reports indicate the organization is already considering potential policy changes.

    This case is only one of the lawsuits targeting the NCAA and its policies towards student-athletes. Several lawsuits are currently pending before various federal courts, alleging the NCAA in its current form violates federal antitrust law. Additionally, the National Labor Relations Board recently ruled that the Dartmouth men’s basketball team are employees of the university, allowing them to organize and schedule a union representation election for early March. The NLRB has also issued a complaint against the University of Southern California, the PAC-12 Conference and the NCAA, alleging the three have misclassified USC’s football and men’s and women’s basketball players as student-athletes rather than employees and that the three organizations are joint employers of the athletes.

    CUPA-HR will continue to monitor for and keep members apprised of any updates on these cases.



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  • Federal Agencies Issue Proposed Rule on Pay Equity and Transparency for Federal Contractors – CUPA-HR

    Federal Agencies Issue Proposed Rule on Pay Equity and Transparency for Federal Contractors – CUPA-HR

    by CUPA-HR | February 14, 2024

    On January 30, the Department of Defense, General Services Administration, and NASA issued a proposed rule to amend the Federal Acquisition Regulation (FAR) to create a salary history ban and require pay transparency during the hiring process for federal contractors and subcontractors. The proposed rule aligns with the Biden administration’s 2022 Executive Order, “Advancing Economy, Efficiency, and Effectiveness in Federal Contracting by Promoting Pay Equity and Transparency.”

    According to the proposed rule, the FAR would be amended to implement a government-wide policy that would:

    1. prohibit contractors and subcontractors from seeking and considering job applicants’ previous compensation when making employment decisions about personnel working on or in connection with a government contract (“salary history ban”); and
    2. require these contractors and subcontractors to disclose on job announcements the compensation to be offered (“compensation disclosure” or “pay transparency”).

    The proposed rule comes as many states and localities have recently implemented salary history bans and pay transparency laws. As the Notice of Proposed Rulemaking notes, 21 states, 22 localities, and Washington, D.C., have put bans into place that prohibit employers from asking job applicants for their salary, and 10 states have pay transparency laws in place, with several other states working toward implementing such laws.

    The agencies have provided a 70-day comment period for the proposed rule, closing on April 1. Stakeholders are invited to submit comments on their support for or opposition to the provisions of the proposed rule. CUPA-HR will monitor for additional updates on this proposed rule and other policy initiatives at the federal level as they relate to pay transparency and salary history bans.



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  • Artificial Intelligence Sparks the Interest of Federal Policymakers – CUPA-HR

    Artificial Intelligence Sparks the Interest of Federal Policymakers – CUPA-HR

    by CUPA-HR | November 15, 2023

    A growing interest in artificial intelligence and its potential impact on the workforce has sparked action by policymakers at the federal level. As employers increasingly turn to AI to fill workforce gaps, as well as improve hiring and overall job quality, policymakers are seeking federal policies to better understand the use and development of the technology. Recent policies include an executive order from the Biden administration and a Senate committee hearing on AI, both of which are detailed below.

    Executive Order on AI Use and Deployment

    On October 30, the Biden Administration released an executive order delineating the “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.” The order urges responsible AI deployment that satisfies workforce development needs and ethical considerations.

    The executive order directs several agency heads to issue guidance and regulations to address the use and deployment of AI and other technologies in several policy areas. Some orders of particular interest to higher education HR include:

    • The secretary of labor is directed to submit a report analyzing ways agencies can support workers who may be displaced by AI.
    • The secretaries of labor, education and commerce are directed to expand education and training opportunities to provide pathways to careers related to AI.
    • The secretary of labor is ordered to publish principles and best practices for employers to help mitigate harmful impacts and maximize potential benefits of AI as it relates to employees’ well-being.
    • The secretary of labor is directed to issue guidance clarifying that employers using AI to monitor employees’ work are required to comply with protections that ensure workers are compensated for hours worked as defined under the Fair Labor Standards Act.
    • The secretary of labor is directed to publish guidance for federal contractors on nondiscrimination in hiring practices that involve the use of AI and other technology.
    • The director of the National Science Foundation is directed to “prioritize available resources to support AI-related education and AI-related workforce development through existing programs.”
    • The secretary of education is ordered to develop resources and guidance regarding AI, including resources addressing “safe, responsible and nondiscriminatory uses of AI in education.”
    • The secretary of state is ordered to establish a program to “identify and attract top talent in AI and other critical and emerging technologies at universities [and] research institutions” and “to increase connections with that talent to educate them on opportunities and resources for research and employment in the United States.”
    • The secretary of homeland security is directed to continue its rulemaking process to modernize the H-1B program and to consider a rulemaking that would ease the process of adjusting noncitizens’ status to lawful permanent resident status if they are experts in AI and other emerging technologies.

    The executive order directs the agency heads to produce their respective guidance and resources within the next year. As these policies and resources begin to roll out, CUPA-HR will keep members updated on any new obligations or requirements related to AI.

    Senate HELP Committee Hearing on AI and the Future of Work

    On October 31, 2023 the Senate Employment and Workplace Safety Subcommittee held a hearing titled “AI and the Future of Work: Moving Forward Together.” The hearing provided policymakers and witnesses the opportunity to discuss the use of AI as a complementary tool in the workforce to skill and reskill American workers and help them remain a valuable asset to the labor market.

    Democrats and Republicans on the committee agreed that AI has the potential to alter the workforce in positive ways but that the growth of the use of the technology needs to be supported by a framework of regulations that do not smother its potential. According to witnesses, employers using AI currently face a patchwork of state and local laws that complicate the responsible use and growth of AI technologies. They argued that a federal framework to address the safe, responsible use of AI could help employers avoid such complications and allow AI use to continue to grow.

    Democrats on the committee also asked whether education opportunities and skills-based training on AI can help provide an employment pathway for workers. Witnesses argued that AI education is needed at the elementary and secondary level to ensure future workers are equipped with the skills needed to work with AI, and that skills-based training models to reskill workers have proven successful.

    CUPA-HR will continue to track any developments in federal AI regulations and programs and will inform members of updates.



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  • Federal Agencies Propose Major Changes to Mental Health Parity Regulations – CUPA-HR

    Federal Agencies Propose Major Changes to Mental Health Parity Regulations – CUPA-HR

    by CUPA-HR | October 11, 2023

    This blog post was contributed by Elena Lynett, JD, senior vice president at Segal, a CUPA-HR Mary Ann Wersch Premier Partner.

    Institutions generally provide comprehensive mental health and substance use disorder (MH/SUD) benefits as part of their commitment to creating a safe and nurturing campus. However, the Mental Health Parity and Addiction Equity Act (MHPAEA) requires that institutions providing MH/SUD benefits ensure parity in coverage between the MH/SUD and medical/surgical benefits. The Department of Health and Human Services, the Department of Labor, and the Department of the Treasury recently proposed major changes to the MHPAEA regulations for group health plan sponsors and insurers.

    The proposed changes address nonquantitative treatment limitations (NQTLs) — a term which references a wide range of medical management strategies and network administrative practices that may impact the scope or duration of MH/SUD benefits. Examples of NQTLs include prior or ongoing authorization requirements, formulary design for prescription drugs, and exclusions of specific treatments for certain conditions.

    If government agencies issue a final rule similar to the proposal, plans will face additional data collection, evaluation, compliance and administrative requirements. The most significant proposed changes are:

    • The “predominant/substantially all” testing that currently applies to financial requirements and quantitative treatment limitations under MHPAEA would apply as a threshold test for any NQTL;
    • New data collection requirements, including denial rates and utilization information;
    • A new “meaningful benefits” standard for MH/SUD benefits;
    • Detailed requirements regarding the documented comparative analysis that plans must have for each applicable NQTL;
    • Introduction of a category of NQTLs related to network composition and new rules aimed at creating parity in medical/surgical and MH/SUD networks;
    • Prohibition on separate NQTLs for MH/SUD;
    • For plans subject to the Employee Retirement Income Security Act of 1974 (ERISA), a requirement that a named fiduciary would have to review and certify documented comparative analysis as complying with MHPAEA; and
    • For non-federal governmental plans, sunset of the ability to opt out of compliance with the MHPAEA rules.

    For more information on the proposed rules, see Segal’s August 1, 2023 insight.

    The deadline to comment on the proposed rules is October 17, 2023. If interested, your institution may file comments here. CUPA-HR will be filing comments with other associations representing higher education and plan sponsors. As proposed, plans could be expected to comply as early as the first day of any plan year beginning on or after January 1, 2025.



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  • Congress and Federal Agencies Consider Paid-Leave Proposals and Protections for Pregnant and Nursing Workers – CUPA-HR

    Congress and Federal Agencies Consider Paid-Leave Proposals and Protections for Pregnant and Nursing Workers – CUPA-HR

    by CUPA-HR | May 24, 2023

    Over the past year, lawmakers have taken an increased interest in establishing and expanding upon benefits and protections for paid leave and pregnant workers. As a result, Congress passed two bills granting workplace protections to pregnant and nursing mothers at the end of 2022, while  considering new federal proposals for paid family and medical leave. This post details some of the recent actions taken by lawmakers toward a federal paid-leave policy, as well as updates from federal agencies on the enforcement of the Pregnant Workers Fairness Act (PWFA) and the Providing Urgent Maternal Protections (PUMP) for Nursing Mothers Act.

    Bipartisan Working Group on Paid Leave

    In April, a group of bipartisan lawmakers in the House of Representatives established the Bipartisan Paid Family Leave Working Group, the goal of which “is to create a bipartisan paid family leave policy that supports American families and businesses.” The group consists of three Republicans — Reps. Stephanie Bice (R-OK), Julia Letlow (R-LA) and Mariannette Miller-Meeks (R-IA) — and three Democrats — Reps. Chrissy Houlahan (D-PA), Colin Allred (D-TX) and Haley Stevens (D-MI).

    In a letter establishing the working group, the lawmakers expressed their intention to explore both state and federal policies that already exist with the goal of creating an established paid-leave policy. The letter discusses both the successes and areas to improve of the Family and Medical Leave Act, and it states that there is a bipartisan consensus that paid leave is an issue that needs to become law.

    FAMILY Act

    On May 17, Sen. Kirsten Gillibrand (D-NY) and Rep. Rosa DeLauro (D-CT) reintroduced the FAMILY Act, which would grant up to 12 weeks of paid leave for employees at companies of all sizes through funds collected by payroll taxes paid by both employees and employers. The FAMILY Act was first introduced in 2013, but the most recent bill expands upon previous text by creating a progressive scale for wage replacement during the time off. Under the bill, the lowest paid workers would be eligible to receive up to 85 percent of their wages during their time off, while the average full-time worker would receive approximately two-thirds of their wages. Additionally, the bill extends coverage to include time off taken to address personal incidents with domestic violence, stalking and/or sexual assault.

    While most Democrats have championed the FAMILY Act as their preferred proposal for paid leave, the bill is unlikely to gain Republican support and will therefore not pass the House during this Congress. Republicans have previously opposed the bill, arguing against the proposed tax increases as well as potential burdens employers may face as a result of a paid-leave mandate. Instead, Republicans who have shown interest in advancing paid-leave policies have considered programs allowing individuals to borrow from their Social Security funds, incentivizing the creation of a private insurance system for leave pay, and providing tax credits to pay for time off.

    PUMP for Nursing Mothers Act

    On May 18, the Department of Labor Wage and Hour Division (WHD) issued a Field Assistance Bulletin (FAB) with enforcement information and public guidance for the PUMP for Nursing Mothers Act. The law went into effect on April 28, after being included in the Consolidated Appropriations Act of 2023 year-end legislation to fund the federal government.

    As a reminder, the PUMP for Nursing Mothers Act amends the Fair Labor Standards Act (FLSA) to expand access to breastfeeding accommodations in the workplace for lactating employees and builds on existing protections in the 2010 Break Time for Nursing Mothers Provision by broadening breastfeeding accommodations and workplace protections. Specifically, the bill ensures reasonable time and space for working individuals to pump in their workplaces as well as remedies for employer violations of the act.

    The FAB provides details on the requirements for reasonable space and break time, compensation, and employer posting of FLSA requirements as provided under the PUMP for Nursing Mothers Act. Employers and field staff alike may use the FAB document as a resource to understand compliance with the act as enforced by WHD.

    Pregnant Workers Fairness Act

    Alongside the PUMP for Nursing Mothers Act, the PWFA was also signed into law under the Consolidated Appropriations Act of 2023. The effective date of the PWFA is June 27, and the Equal Employment Opportunity Commission (EEOC) was expected to issue proposed regulations on how best to govern and enforce the PWFA by then.

    As of May, however, the EEOC has yet to release any proposed regulations, and it seems likely that the agency will not be able to issue a proposed rule by the June 27 date. The commission currently has two Democratic and two Republican commissioners, and given the need for a majority of commissioners to vote to advance a rulemaking, the agency is unable to move proposed rules forward because commissioners are split along party lines. Through the legislation, Congress has allowed the EEOC through the end of 2023 to finalize a rulemaking on the PWFA, which may or may not be achieved,  depending on whether the Senate is able to confirm Kalpana Kotagal as the third Democratic appointee on the commission. In lieu of the proposed rulemaking, the EEOC has issued guidance on the law through an FAQ webpage addressing the protections granted under the law, which stakeholders may use as they wait for the official regulations.

    CUPA-HR continues to monitor any developments related to these proposals and laws and will keep members apprised of any policy updates related to paid leave and protections for pregnant and nursing workers.



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  • Federal Judge Blocks Department of Education’s Title IX Guidance – CUPA-HR

    Federal Judge Blocks Department of Education’s Title IX Guidance – CUPA-HR

    by CUPA-HR | July 27, 2022

    On July 15, a federal judge from the U.S. District Court of the Eastern District of Tennessee issued a preliminary injunction blocking enforcement of the Department of Education’s Title IX guidance that prohibits discrimination on the basis of gender identity and sexual orientation. Specifically, the ruling blocks enforcement of a June 2021 Notice of Interpretation issued by the department’s Office for Civil Rights (OCR) in light of the Supreme Court’s 2020 decision in Bostock v. Clayton County and President Biden’s Executive Order, “Guaranteeing an Educational Environment Free from Discrimination on the Basis of Sex, Including Sexual Orientation and Gender Identity.”

    Twenty Republican-controlled states, led by their attorneys general, were listed as plaintiffs on the case, arguing that the department’s guidance should not be enforced by the agency as it did not go through the notice-and-comment rulemaking process and is not codified law. They claimed that the department’s enforcement of the guidance also puts states at risk of losing significant federal funding if they do not comply with the guidance. The Eastern District of Tennessee judge ruled in favor of the plaintiffs, issuing the preliminary injunction while stating that the guidance interferes with states’ abilities to enforce their own laws that prohibit transgender students from participating on sports teams or using restrooms that align with their gender identity.

    As it currently stands, the injunction applies only to the 20 states listed as plaintiffs in the case, potentially impacting the policies of colleges and universities in those states. Notably, the injunction does not impact the recently issued Title IX proposed regulations that are currently undergoing a 60-day notice-and-comment period. If the Title IX regulations are codified into law, however, they may face similar legal challenges.

    CUPA-HR will continue to monitor this issue and keep members apprised of any developments related to Title IX.



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  • CUPA-HR Files Comment Extension Request to USDA Regarding New Blacklisting Regulation for Federal Contractors – CUPA-HR

    CUPA-HR Files Comment Extension Request to USDA Regarding New Blacklisting Regulation for Federal Contractors – CUPA-HR

    by CUPA-HR | March 21, 2022

    On February 17, the U.S. Department of Agriculture (USDA) issued a Notice of Proposed Rulemaking (NPRM) outlining plans to impose new HR-related conditions on USDA contracts. If finalized, the rule would require federal contractors on projects procured by the USDA to certify their compliance with dozens of federal and state labor laws and executive orders. The proposal mirrors similar “blacklisting” regulations pursued by the USDA during the Obama administration.

    The USDA provided only 32 days for stakeholders to submit comments on the proposal. CUPA-HR, along with several other higher education associations, filed an extension request with the department asking for an additional 90 days to “evaluate the NPRM’s impact on [members’] research missions and collect the information needed in order to provide thoughtful and accurate input to the USDA.” CUPA-HR plans to file comments on the proposal as well.

    The new proposed rulemaking amends the Agriculture Acquisition Regulation (AGAR) to require federal contractors on USDA supply and service projects that exceed the simplified acquisition threshold to certify that they and their subcontractors and suppliers are “in compliance with” 15 federal labor laws, their state equivalents and executive orders. This includes, but is not limited to:

    • Fair Labor Standards Act;
    • Occupational Safety and Health Act;
    • National Labor Relations Act;
    • Service Contract Act;
    • Davis-Bacon Act;
    • Title VII of the Civil Rights Act;
    • Americans with Disabilities Act;
    • Age Discrimination in Employment Act; and
    • Family and Medical Leave Act.

    Additionally, federal contractors submitting offers for a project would be required to disclose to the USDA previous violations and certify they and their subcontractors “are in compliance with” any required corrective actions for those violations. They would also be required to alert USDA to any future adjudications of non-compliance.

    In 2011, the USDA tried to implement a similar policy via a Direct Final Rule and NPRM, but was forced to withdraw both due to stakeholder pushback. CUPA-HR filed comments with the Society for Human Resource Management calling the rules arbitrary and capricious. Our comments also criticized the rules for not adequately clarifying how contractors were expected to comply with the changes and for imposing severe penalties. Additionally, CUPA-HR joined comments filed by the American Council on Education and several other higher education associations that argued the USDA’s rules “impose[d] an unmanageable compliance burden and uncertain compliance risk for colleges and universities that conduct agricultural research under contracts with the [USDA].”

    Additionally, the Obama administration issued an executive order in July 2014 implementing a similar government-wide policy. The Federal Acquisition Regulation (FAR) Council and the Department of Labor issued regulations and guidance, respectively, implementing the order, but they were blocked by a federal judge in October 2016 for violating the First Amendment and due process rights. Congress also passed a Congressional Review Act challenge to the executive order in 2017, permanently withdrawing the executive order and barring the FAR Council from issuing any substantially similar regulations.

    Unlike past proposals, this time the USDA has stated that the certifications will be subject to the False Claims Act (FCA), which provides for substantially increased liability. The FCA provides for treble damages and penalties and allows for private citizens to file suits on behalf of the government (called “qui tam” suits). Qui tam litigants receive a portion of the government’s recovery. According to the Department of Justice (DOJ), the awards to qui tam litigants in FCA suits topped $238 million in 2021. The same DOJ statistics show qui tam suits were the majority of FCA claims, with the government filing 203 new suits under FCA in 2021 compared to 598 qui tam suits in the same year.

    CUPA-HR will continue to monitor this issue closely.



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