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Special Requirements for Federal Contractors

Mandatory Use of E-Verify for Employment Eligibility

E-Verify is an internet-based system that allows you to electronically confirm an employee’s legal working status. The system compares information from an employee’s Form I-9 (Employment Eligibility Verification) to data from U.S. Department of Homeland Security and Social Security Administration records.

The only free online service of its kind, E-Verify is fast and accurate. It verifies employee data against millions of government records to provide results in three to five seconds.

The goal of the E-Verify is two-fold. It ensures that the federal government only does business with companies using legal workers while also making it easier for those employers to comply with the law.

According to U.S. Citizenship and Immigration Services, there were 23,937,505 E-Verify cases in fiscal year 2013. Of these, 98.81 percent were automatically confirmed as work authorized – either instantly or within 24 hours. As a result, nothing more was required of the employee or employer.

Of the 1.19 percent of employees who received initial system mismatches, .22 percent were confirmed as work authorized after contesting and resolving the mismatch. Only .98 percent of employees were found not work authorized.

Because E-Verify participation is mandatory for all employers with federal government contracts, certain postings are also mandatory. They are:

E-Verify poster

Right to Work poster

These posters inform applicants and employees of their rights under the E-Verify program, and lets them know they can’t be discriminated against because of their national origin or citizenship status.

Posting instructions
Both posters must be displayed in English and Spanish, even if you have no Spanish-speaking employees. Also, they must be displayed where applicants and employees can see them, so most companies comply by posting near an entrance.

Drug-Free Workplace Act

The Drug-Free Workplace Act of 1988 requires federal contractors to promote drug-free workplaces as a condition of receiving contracts or grants from federal agencies.

Drug-free workplace programs can help improve worker safety and health, as well as add value.

Some agencies, including the Department of Defense (DOD), the Department of Energy (DOE), the Nuclear Regulatory Commission (NRC) and the National Aeronautics and Space Administration (NASA), take this a step further with specific regulations for contractors, grantees and licensees. Among these regulations are fitness-for-duty requirements or drug-free workplace programs that include drug testing.

Only the Department of Transportation (DOT) has drug and alcohol requirements that apply throughout the entire industry.

Steps to promoting a drug-free workplace

A comprehensive drug-free workplace approach includes four parts:

Create a drug-free workplace policy
Explain why you are instituting the policy, then describe the behaviors that won’t be permitted. For example: “The use, possession, transfer or sale of illegal drugs or controlled substances by employees is prohibited.” You’ll also want to specify that working or performing company business under the influence of alcohol is not permitted. Tell employees what will happen if they violate the policy.
Train supervisors
Explain the policy to supervisors and what their responsibilities are. Then tell them how to recognize on-the-job drug or alcohol use, how to deal with employees whose poor performance is related to alcohol or substance abuse, and how and when to decide that an employee’s performance or behavior warrants a drug test. Teach them to refer employees to your employee assistance program or other sources of help. They shouldn’t attempt to counsel employees.
Educate employees
Explain all aspects of your drug-and-alcohol policy to employees. Explain how alcohol and drugs affect their performance, safety and relationships. And don’t forget to tell employees how to get help if they need it.
Test for drugs and alcohol
Assuming you’re permitted to conduct alcohol and drug testing (based on state and industry regulations), you should consider:
Who will be tested? (Job applicants? Those in safety-sensitive positions? Anyone at any time?)
When will people be tested? (When applying for a job? When there is probable cause? On a random basis?)
Which drugs will you test for?
How will you conduct tests?

Above all, keep in mind that such programs must uphold employee rights of privacy.

Mandatory Postings for Federal Contractors

Federal contractors must comply with specific labor law posting requirements, based largely on the types of contracts, funding and the amount of the contracts.

It’s important to understand that federal contractors can exist in a variety of industries and that many different types of businesses are now covered by federal contractor posting requirements.

In fact, the number of businesses affected by these requirements has grown significantly in recent years, mainly because of developments in the economy and new government funding initiatives that apply to more types of businesses. While federal contracts were previously only associated with construction or defense contractors, they now come into play with businesses in finance and banking, telecommunications, technology, education, transportation and even a lot of non-profit organizations.

What follows is a list of federal contractor postings, with specifics on who needs to display them and why.

National Labor Relations Act (NLRA) Poster
Don’t make the mistake of thinking you’re not required to display this NLRA poster based on the earlier situation with the National Labor Relations Board and its lack of approval of a broad-reaching poster. That proposed poster, which would have affected ALL employers, was struck down in numerous court cases in 2013 and invalidated. However, the NLRA posting requirement by the DOL -- as part of Executive Order 13496 -- still applies to federal contractors.
About the poster: Informs employees of their rights under the NLRA to form, join and support a union, as well as bargain collectively with their employer. (Note: These are federal rights guaranteed to all employees, even if you have no unions and there is no threat of unionization in your business or industry.)
Who must post: All federal contractors with contracts of $100,000 or more. (The posting requirement is typically written into applicable contracts as a condition for signing the contract or receiving funding. As such, failure to post is considered a breach of contract.)
Posting instructions: Must be posted in English and any language common to a significant portion of workers who aren’t fluent in English. Also, the poster has a minimum size requirement of 11 x 17, so it can’t be reduced to save on wall space.
E-Verify & Right to Work Poster
About the poster: It’s actually two posters – the E-Verify participation poster and the Right to Work poster. They inform applicants and employees of their rights under the E-Verify program, and lets them know they can’t be discriminated against because of their national origin or citizenship status.
Who must post: Because E-Verify participation is mandatory for all employers with federal government contracts, the postings are also mandatory. For employers without federal contracts or locations that don’t work on federal contracts, the posting requirement depends on the state. Federal agencies and public sector employers in certain states also must participate.
Posting instructions: Both posters must be displayed in English and Spanish, even if you have no Spanish-speaking employees. Also, they must be displayed where applicants and employees can see them, so most companies comply by posting near an entrance.
Walsh-Healey Public/Service Contracts Poster
About the poster: Informs employees of the federal minimum wage rate, overtime requirements, child labor rules and other safety and health requirements related to contract work.
Who must post: Federal contractors with government service contracts of $2,500 or more, or more than $10,000 if in the manufacturing or furnishing of materials industry.
Posting instructions: See box below.
American Recovery and Reinvestment Act (ARRA) Whistleblower Rights Poster
About the poster: Informs employees of their whistleblower rights, letting them know they can’t be retaliated against for making any kind of complaint or disclosure about fraud, waste or abuse related to any ARRA funding.
Who must post: Federal contractors who receive any funding under the American Recovery and Reinvestment Act.
Posting instructions: See box below.
Department of Defense (DOD) Fraud Hotline Poster
About the poster: Informs employees of the DOD Fraud Hotline number and how to anonymously report fraud, waste or abuse related to any DOD funding.
Who must post: Federal contractors who have contracts with the Department of Defense exceeding $5,000,000.
Posting instructions: See box below.
Department of Homeland Security (DHS) Fraud Hotline Poster
About the poster: Provides contact information for employees to report fraud, waste or abuse related to DHS programs or operations.
Who must post: Federal contractors who have contracts exceeding $5,000,000 with any funding by DHS disaster relief funds.
Posting instructions: Must be a bilingual posting in English and Spanish.
Notice to Workers with Disabilities/Special Minimum Wage Poster
About the poster: Explains the special minimum wage program for workers with disabilities and who qualifies, as well as overtime rights, child labor laws and how fringe benefits are handled.
Who must post: Federal contractors who obtain approval from the Department of Labor to pay disabled employees a special minimum wage, or “commensurate wage rate” due to certain physical or mental impairment.
Posting instructions: See box below.
Davis-Bacon Act Poster
About the poster: Notifies employees of wage requirements and overtime pay under the Davis-Bacon Act. Also informs them about the penalties their employer can face for making improper wage payments or withholding overtime time, which can include getting their contract payments held up, contract termination or debarment for up to three years.
Who must post: Federal contractors with any federally funded construction projects for $2,000 or more, for the construction or repair of public buildings or public works.
Posting instructions: See box below.
Department of Transportation (DOT) Federal Highway Construction Poster
About the poster: Encourages employees to report any kind of fraud or abuse related to highway construction jobs, including false statements, reports or claims about the quality, quantity or cost of work performed on the contract.
Who must post: Federal contractors working on any federally funded highway construction projects.
Posting instructions: See box below.
Federal contractor posting guidelines

You must display the posters related to any applicable posting laws in all facilities where any contract-related work is being performed. Keep in mind that covered work may include support roles, such as payroll or HR for the employees performing the contract work, or other support functions such as IT, administration, inventory management, fulfillment or other areas of your business.

The number of posting display sites in each facility depends on company logistics and the accessibility of the posters to your employees. While each posting law has its own specific language about accessibility, the general rule is that you must display postings in a prominent and accessible location that is highly visible to all employees involved in federal contract work.

Depending on the layout of your facility, the above guideline could mean posting in multiple locations at the same address. In a large facility, this could involve posting at the entrance, as well as employee breakrooms to ensure full access. A smaller facility, on the other hand, may be okay with just one display area as long as all employees have regular access to the posters.

Consider applicant area posting requirements, too. In addition to four out of the six federal posters that must be displayed where applicants (not just employees) can view them, you’re required, by law, to post the E-Verify and Right to Work posters near entrances for applicants to view

FEATURED SOLUTION
Labor Law Compliance Made Easy - Find out which labor law posters are required for your state. Learn More​​​​
Shanna Wall
Hosted by Shanna Wall,
Compliance Attorney, ComplyRight
This webinar will cover the recommended actions (or inactions) and risks involved for businesses, in light of the uncertain future of the new FLSA rule.
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