[Federal Register Volume 83, Number 163 (Wednesday, August 22, 2018)]
[Rules and Regulations]
[Pages 42569-42570]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17824]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 11, 22, and 52
[FAC 2005-100; FAR Case 2017-001, Item I; Docket No. 2017-0001;
Sequence No. 1]
RIN 9000-AN27
Federal Acquisition Regulation; Paid Sick Leave for Federal
Contractors
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: DoD, GSA, and NASA are adopting as final, without change, an
interim rule amending the Federal Acquisition Regulation (FAR) to
implement the Executive Order (E.O.), Establishing Paid Sick Leave for
Federal Contractors. The interim rule also implemented a final rule
issued by the Department of Labor.
DATES: Effective: August 22, 2018.
FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement
Analyst, at 202-969-7207 for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat Division at 202-501-4755. Please cite FAC 2005-100, FAR
Case 2017-001.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published an interim rule in the Federal
Register at 81 FR 91627 on December 16, 2016, to implement E.O. 13706,
Establishing Paid Sick Leave for Federal Contractors. The E.O. was
signed September 7, 2015, and was published in the Federal Register at
80 FR 54697 on September 10, 2015. The E.O. seeks to increase
efficiency and cost savings in the work performed by parties who
contract with the Federal Government by ensuring that employees on
those contracts can earn up to 7 days or more of paid sick leave
annually, including paid sick leave for family care. The interim FAR
rule also implemented the final rule issued by the Wage and Hour
Division of the Department of Labor (DOL) to implement E.O. 13706. The
DOL final rule, entitled ``Establishing Paid Sick Leave for Federal
Contractors'', was published in the Federal Register at 81 FR 67598 on
September 30, 2016. Seven respondents submitted comments on the interim
FAR rule.
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the comments in the
development of the final rule. A discussion of the comments is provided
as follows:
A. Summary of Significant Changes
There are no changes to the interim rule.
B. Analysis of Public Comments
Comment: Six respondents strongly supported the interim FAR rule.
The respondents stated that the interim rule is necessary to guarantee
more workers the job and economic security that paid sick days provide,
reduce workplace contagion, and increase productivity and retention.
The respondents also presented rationale as to why the interim rule
will benefit businesses, individual workers, taxpayers, and the
economy.
Response: Noted.
Comment: One respondent provided a scenario and asked whether in
that instance the contract was subject to the requirements of this FAR
rule. The respondent described a contract action extending the term of
the contract by exercising an option adjusting the price for
escalations in labor rates.
Response: According to DOL (see Notice of Proposed Rulemaking, 81
FR 9592, published February 25, 2016), unilateral exercise of a
contract option that has pre-negotiated prices that are subject to
adjustment due to escalation in labor rates is not a new contract
covered by E.O. 13706, as implemented in the DOL rule and FAR rule, as
long as no bilateral negotiations occur (other than any necessary to
determine and effectuate those pricing adjustments).
III. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563, Improving Regulation and Regulatory Review, emphasizes the
importance of quantifying both costs and benefits, of reducing costs,
of harmonizing rules, and of promoting flexibility. This is not a
significant regulatory action and, therefore, was not subject to review
under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated
September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
IV. Executive Order 13771
This rule is not subject to E.O. 13771, Reducing Regulation and
Controlling Regulatory Costs, because this rule is not a significant
regulatory action under E.O. 12866.
V. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared a Final Regulatory Flexibility
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5
U.S.C. 601 et seq. The FRFA is summarized as follows:
DoD, GSA, and NASA are converting to a final rule, without
change, an interim rule that amended the Federal Acquisition
Regulation (FAR) to implement Executive Order (E.O.) 13706,
Establishing Paid Sick Leave for Federal Contractors, dated
September 7, 2015, and associated Department of Labor (DOL)
regulatory requirements at 29 CFR part 13. DOL published a final
regulatory flexibility analysis in their final rule (81 FR 67598 at
67703).
The FAR rule established requirements for contractors under
contracts containing the clauses at FAR 52.222-6, Construction Wage
Rate Requirements, or FAR 52.222-41, Service Contract Labor
Standards, i.e., ``covered contracts,'' to allow employees to accrue
and use paid sick leave in accordance with E.O. 13706 and 29 CFR
part 13. Contractors must also include a paid sick leave contract
clause in covered subcontracts and require covered subcontractors to
include the substance of the clause in covered lower-tier contracts.
No public comments were received in response to the initial
regulatory flexibility analysis.
This rule applies to contracts and subcontracts at all tiers
covered by the Service Contract Labor Standards statute, or the Wage
Rate Requirements (Construction) statute, which require performance
in whole or in part within the United States. For procurement
contracts where employees' wages are governed by the Fair Labor
[[Page 42570]]
Standards Act, this rule applies when the contract exceeds the
micro-purchase threshold, as defined in FAR 2.101. When performance
is in part within and in part outside the United States, the rule
applies to the part of the contract or subcontract performed within
the United States. Data available through the Federal Procurement
Data System (FPDS) for Fiscal Year 2015, reveals contracts were
awarded to 18,874 unique small business vendors for services, which
contained the FAR clause at 52.222-41, Service Contract Labor
Standards. Additionally, contracts were awarded to 6,753 unique
small business vendors for construction, which contained the FAR
clause at 52.222-6, Construction Wage Rate Requirements, for a total
of 25,627 unique small businesses.
The DOL final rule identifies records to be kept by all firms,
including small entities (29 CFR 13.25). Some records are already
required under the Fair Labor Standards Act, Service Contract Labor
Standards statute, the Wage Rate Requirements (Construction)
statute, and their governing regulations. DOL noted in their final
rule (81 FR 67598 at 67669) that OMB assigned control number 1235-
0029 for the recordkeeping requirements related to paid sick leave.
The information collection requirement under 1235-0029 includes
recordkeeping and regulatory familiarization.
Regarding initial implementation, DOL assumed firms that need to
create a sick leave policy will each spend 10 hours of time
developing this policy, regardless of the number of employees, and
firms with a program in place will spend one hour, regardless of the
number of employees. DOL also stated in its final rule that
``Transfers from small contractors and costs to small contractors in
Year 1 are less than 0.02 percent of revenues on average and are no
more than 0.17 percent in any industry''. Therefore, according to
DOL its final rule would not have a significant impact on small
businesses. This FAR rule finalizes the interim rule without change
and neither increases nor decreases the cost of the interim rule (81
FR 91627), which has been in effect since January 1, 2017.
There are no known significant alternatives to the rule that
would accomplish the stated objectives of the E.O. and DOL
regulation. In its final rule, DOL introduced several changes and
clarifications that may ease the compliance burden. For instance,
DOL provided greater detail and clarity about how companies with
paid time off policies can use those policies to satisfy their
obligations under the E.O. In addition, if a collective bargaining
agreement (CBA) ratified before September 30, 2016, applies to an
employee's work performed on or in connection with a covered
contract and provides at least 56 hours of paid sick time each year,
the employee will be exempted from the requirements of the E.O. and
29 CFR part 13 until CBA termination or January 1, 2020, whichever
is earlier.
The rule was also modified to allow employers to meet the
requirements of this rule through multiemployer plans or other
funds, plans, or programs. This may ease the burden for those
employers in industries with transitory or mobile workforces.
Interested parties may obtain a copy of the FRFA from the
Regulatory Secretariat Division. The Regulatory Secretariat Division
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of
the Small Business Administration.
VI. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies.
However, the information collection requirements to the paperwork
burden were previously approved for the DOL regulations under OMB
Control Numbers 1235-0018, Records to be kept by Employers--Fair Labor
Standards Act, 1235-0021, Employment Information Form, and 1235-0029,
Government Contractor Paid Sick Leave.
List of Subjects in 48 CFR Parts 1, 11, 22, and 52
Government procurement.
Dated: July 31, 2018.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Interim Rule Adopted as Final Without Change
0
Accordingly, the interim rule amending 48 CFR parts 1, 11, 22, and 52
which was published in the Federal Register at 81 FR 91627 on December
16, 2016, is adopted as a final rule without change.
[FR Doc. 2018-17824 Filed 8-21-18; 8:45 am]
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