Final Rule on Nondisplacement of Qualified Workers under Federal Service Contracts

On December 21, 2012, the Department of Labor issued a final rule to implement Executive Order 13495, dealing with the nondisplacement of qualified workers under service contracts. The final rule becomes effective on January 18, 2013.

The Executive Order and final rule will, in most cases, obligate contractors and subcontractors to offer jobs to employees employed under a predecessor contract when a new federal contract is awarded for the same or similar services at the same location. Successor contractors are not required to hire all of the predecessor’s employees, but are permitted to reduce the size of the workforce and give first preference to certain of the predecessor’s current employees. Contractors also must include provisions in each subcontract to ensure that subcontractors comply with the Executive Order as well.

Where the successor contract is a contract subject to the Executive Order and final rule, the contracting officer must ensure that the contractor provides written notice to eligible employees of the predecessor contractor of their possible right to an offer of employment. Such notice may either be posted in a conspicuous place at the worksite or may be delivered to the employees individually. An offer of employment may be for any position for which the employee is qualified; the offer need not be for the same position that the employee previously held.

Click here for the full text of the final rule.