Non displacement of Qualified Workers Under Service Contracts

On December 13th, 2023, the Department of Labor announced their long-awaited Final Rule outlining the requirements of Executive Order 14055 “Nondisplacement of Qualified Workers Under Service Contracts”. The Final Rule will become effective on February 12th, 2024, 60 days after its issuance, and specifies the obligations of Contracting Agencies, as well as Contractors under the Executive Order.

Applicability Date

The Executive Order will apply to “solicitations issued on or after the effective date of the final regulations issued by the Federal Acquisition Regulatory Council (FAR Council)”.

Covered Contracts

Any contract for services subject to the Service Contract Act (SCA) and which is awarded or results from a Solicitation issued after the applicability date of the Executive Order will be subject to its requirements and must include the non-displacement contract clause, as long as it is “equal or exceeds the simplified acquisition threshold defined in 41 USC 134”.

Predecessor (Outgoing) Contractor Requirements

Predecessor Contractors are required to furnish a certified list, to the Contracting Officer, including the name, address, as well as phone numbers and email addresses of all service employees working on the contract, and any subcontracts, at the time the list is submitted. The list must be provided “Not less than 30 calendar days" before completion of the predecessor contract. The list must also include the anniversary dates of each service employee under the contract.

The contractor must also provide written notice to service employees of their possible right to an offer of employment on the successor contract. The notice must either be posted in a conspicuous place at the worksite or delivered to the employees individually. If a significant portion of the workers are not fluent in English, the notice must be provided in both English and a language in which the employees are fluent.

Successor (Incoming) Contractor Requirements

Successor Contractors will be required to make an express offer of employment, in writing, to each service employee employed on a predecessor contract for a position for which the employee is qualified before they can fill any staff vacancies with other candidates. The offer must remain open for at least 10 business days for the employee to make a decision regarding whether to accept or reject said offer.

Contractors are also required to maintain records related to their compliance with the Executive Order, including copies of all written offers of employment and any records relied upon by the contractor to claim any exemptions from the E.O.’s requirements.

Do you feel that your company and team are up to date with this most recent requirement? Onsi Group is ready to assist you with our expert guidance and support to navigate compliance with these new regulations and standards. Feel free to reach out to us through our Contact form on our website or send us an email at trust@onsigroup.com to ensure that you are prepared for these requirements.