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All Change? What the Election Result Could Mean for Federal Contractors

As the dust settles following the presidential election, one of the questions that federal government contractors and subcontractors will be asking themselves is which, if any, of President Obama’s executive orders affecting labor and employment matters will survive in the new Trump Administration. For example, will Ivanka Trump’s advocacy of wage equality help preserve initiatives such as President Obama’s proposal to collect summary pay data from employers to help identify equal pay issues? Or will such initiatives be swept aside in the first few days of the Trump presidency?

President-elect Trump’s “Contract with the American Voter,” which he describes as his “100-day action plan to Make America Great Again,” promises to, among other things:

  • “cancel every unconstitutional executive action, memorandum and order issued by President Obama,” and
  • impose “a requirement that for every new federal regulation, two existing regulations must be eliminated.”

In the last few years, President Obama has signed several significant executive orders regulating workplace practices for federal government contractors and subcontractors. These include the recent “blacklisting rule” that requires disclosure of prior labor law violations (which is currently subject to a nationwide preliminary injunction – see our commentary here) and rules providing for paid sick leave and an increase in the minimum hourly wage. All of these, and more, could be on the chopping block.

If these executive orders are rescinded, what will it mean for covered employers? For the most part, the removal of the additional regulatory obligations will not require much, if any, preparation or administrative burden. However, employers will need to think about how their employees will react to certain changes, in particular any proposed reductions of hourly wages below the current $10.15 minimum or the removal of paid sick leave. Preserving good employee relations may drive some employers to maintain these practices even if the legal requirements are removed.

As with many aspects of President-elect Trump’s agenda, we will need to wait and see what happens over the coming months. In the meantime, covered contractors should remember that existing rules and regulations remain in effect and others are still due to come into effect in the final weeks of the Obama Administration, including an increase in the minimum wage to $10.20 per hour under Executive Order 13658, the implementation of the paycheck transparency requirements under Executive Order 13673, and the introduction of paid sick leave requirements under Executive Order 13706, all of which come into effect on January 1, 2017.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.