38488 Federal Register / Vol. 74, No. 147 / Monday, August 3, 2009 / Proposed Rules 

DEPARTMENT OF LABOR 

Office of Labor-Management 

Standards 

29 CFR Part 471 

RIN 1215–AB70 

Notification of Employee Rights Under 

Federal Labor Laws 

AGENCY: Office of Labor-Management 

Standards, Employment Standards 

Administration, Department of Labor. 

ACTION: Notice of proposed rulemaking; 

request for comments. 

SUMMARY: This Notice of Proposed 

Rulemaking (NPRM) proposes a 

regulation to implement Executive 

Order 13496, which was signed by 

President Barack Obama on January 30, 

2009. Executive Order 13496 (‘‘the 

Executive Order,’’ ‘‘the Order,’’ or ‘‘EO 

13496’’) requires nonexempt Federal 

departments and agencies to include 

within their Government contracts 

specific provisions requiring that 

contractors and subcontractors with 

whom they do business post notices 

informing their employees of their rights 

as employees under Federal labor laws. 

The Executive Order requires the 

Secretary (‘‘Secretary’’) of the 

Department of Labor (‘‘Department’’) to 

initiate a rulemaking to prescribe the 

size, form, and content of the notice that 

must be posted by a contractor under 

paragraph 1 of the contract clause 

described in section 2 of the Order. 

Under the Executive Order, Federal 

Government contracting departments 

and agencies must include the required 

contract provisions in every 

Government contract, except for 

collective bargaining agreements and 

contracts for purchases under the 

Simplified Acquisition Threshold, and 

except in those cases in which the 

Secretary exempts a contracting 

department or agency with respect to 

particular contracts or subcontracts or 

class of contracts or subcontracts 

pursuant to section 4 of the Order. As 

required by the Executive Order, this 

proposed rule establishes the content of 

the notice required by the Executive 

Order’s contract clause, and implements 

other provisions of the Executive Order, 

including provisions regarding 

sanctions, penalties, and remedies that 

may be imposed if the contractor or 

subcontractor fails to comply with its 

obligations under the Order and the 

implementing regulations. 

DATES: Comments regarding this 

proposed rule must be received by the 

Department of Labor on or before 

September 2, 2009. 

ADDRESSES: You may submit comments, 

identified by 1215–AB70, only by the 

following methods: 

Internet—Federal eRulemaking Portal. 

Electronic comments may be submitted 

through http://www.regulations.gov. To 

locate the proposed rule, use key words 

such as ‘‘Department of Labor’’ or 

‘‘Notification of Employee Rights Under 

Federal Labor Laws’’ to search 

documents accepting comments. Follow 

the instructions for submitting 

comments. 

Delivery: Comments should be sent to: 

Denise M. Boucher, Director of the 

Office of Policy, Reports and Disclosure, 

Office of Labor-Management Standards, 

U.S. Department of Labor, 200 

Constitution Avenue, NW., Room N– 

5609, Washington, DC 20210. Because 

of security precautions the Department 

continues to experience delays in U.S. 

mail delivery. You should take this into 

consideration when preparing to meet 

the deadline for submitting comments. 

The Office of Labor-Management 

Standards (OLMS) recommends that 

you confirm receipt of your delivered 

comments by contacting (202) 693–0123 

(this is not a toll-free number). 

Individuals with hearing impairments 

may call (800) 877–8339 (TTY/TDD). 

Only those comments submitted 

through http://www.regulations.gov, 

hand-delivered, or mailed will be 

accepted. Comments will be available 

for public inspection at http:// 

www.regulations.gov and during normal 

business hours at the above address. 

The Department will post all 

comments received on http:// 

www.regulations.gov without making 

any change to the comments, including 

any personal information provided. The 

http://www.regulations.gov Web site is 

the Federal e-rulemaking portal and all 

comments posted there are available 

and accessible to the public. The 

Department cautions commenters not to 

include their personal information such 

as Social Security numbers, personal 

addresses, telephone numbers, and 

e-mail addresses in their comments as 

such submitted information will become 

viewable by the public via the http:// 

www.regulations.gov Web site. It is the 

responsibility of the commenter to 

safeguard his or her information. 

Comments submitted through http:// 

www.regulations.gov will not include 

the commenter’s e-mail address unless 

the commenter chooses to include that 

information as part of his or her 

comment. 

FOR FURTHER INFORMATION CONTACT: 

Denise M. Boucher, Director, Office of 

Policy, Reports and Disclosure, Office of 

Labor-Management Standards, 

Employment Standards Administration, 

U.S. Department of Labor, 200 

Constitution Avenue, NW., Room N– 

5609, Washington, DC 20210, (202) 693– 

1185 (this is not a toll-free number), 

(800) 877–8339 (TTY/TDD). 

SUPPLEMENTARY INFORMATION: The 

Proposed Rule is organized as follows: 

I. Background—provides a brief description 

of the development of the Proposed Rule 

II. Authority—cites the legal authority 

supporting the Proposed Rule, 

Departmental re-delegation authority, 

and interagency coordination authority 

III. Overview of the Rule—outlines the 

proposed regulatory text 

IV. Regulatory Procedures—sets forth the 

applicable regulatory requirements and 

requests comments on specific issues 

I. Background 

On January 30, 2009, President Barack 

Obama signed Executive Order 13496, 

entitled ‘‘Notification of Employee 

Rights Under Federal Labor Laws.’’ 74 

FR 6107 (February 4, 2009). The 

purpose of the Order is ‘‘to promote 

economy and efficiency in Government 

procurement’’ by ensuring that 

employees of certain Government 

contractors are informed of their rights 

under Federal labor laws. Id., Sec. 1. As 

the Order states, ‘‘When the Federal 

Government contracts for goods or 

services, it has a proprietary interest in 

ensuring that those contracts will be 

performed by contractors whose work 

will not be interrupted by labor unrest. 

The attainment of industrial peace is 

most easily achieved and workers’ 

productivity is enhanced when workers 

are well informed of their rights under 

Federal labor laws, including the 

National Labor Relations Act (Act), 29 

U.S.C. 151 et seq.’’ The Order reiterates 

the declaration of national labor policy 

contained in the National Labor 

Relations Act (‘‘NLRA’’), 29 U.S.C. 151, 

that ‘‘encouraging the practice and 

procedure of collective bargaining and 

* * * protecting the exercise by 

workers of full freedom of association, 

self-organization, and designation of 

representatives of their own choosing, 

for the purpose of negotiating the terms 

and conditions of their employment or 

other mutual aid or protection’’ will 

‘‘eliminate the causes of certain 

substantial obstructions to the free flow 

of commerce’’ and ‘‘mitigate and 

eliminate these obstructions when they 

have occurred.’’ Id., Section 1, quoting 

29 U.S.C. 151. As the Order concludes, 

‘‘[r]elying on contractors whose 

employees are informed of such rights 

under Federal labor laws facilitates the 

efficient and economical completion of 

the Federal Government’s contracts.’’ Id. 


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The Order achieves the goal of 

notification to employees of federal 

contractors of their legal rights through 

two related mechanisms. First, Section 

2 of the Order provides the complete 

text of a contract clause that 

Government contracting departments 

and agencies must include in all 

covered Government contracts and 

subcontracts. 74 FR at 6107–6108, Sec. 

2. Second, through incorporation of the 

specified clause in its contracts with the 

Federal government, contractors thereby 

agree to post a notice in conspicuous 

places in their plants and offices 

informing employees of their rights 

under Federal labor laws. Id., Sec. 2, 

Para. 1. 

The Order states that the Secretary of 

Labor (‘‘Secretary’’) ‘‘shall be 

responsible for [its] administration and 

enforcement.’’ 74 FR at 6108, Sec. 3. To 

that end, the Order delegates to the 

Secretary the authority to ‘‘adopt such 

rules and regulations and issue such 

orders as are necessary and appropriate 

to achieve the purposes of this order.’’ 

Id., Sec. 3(a). In particular, the Order 

requires the Secretary to prescribe the 

content, size, and form of the employee 

notice. Id., Sec. 3(b). In addition, the 

Order permits the Secretary, among 

other things, to make modifications to 

the contractual provisions required to be 

included in Government contracts (Sec. 

3(c)); to provide exemptions for 

contracting departments or agencies 

with respect to particular contracts or 

subcontracts or class of contracts or 

subcontracts for certain specified 

reasons (Sec. 4); to establish procedures 

for investigations of Government 

contractors and subcontractors to 

determine whether the required contract 

provisions have been violated (Sec. 5); 

to conduct hearings regarding 

compliance (Sec. 6); and to provide for 

certain remedies in the event that 

violations are found (Sec. 7). Id., 74 FR 

at 6108–6109. Accordingly, the 

Secretary proposes the following 

regulations to implement the policies 

and procedures set forth in the 

Executive Order. The specific standards 

and procedures proposed to implement 

the Executive Order will be discussed in 

detail in Section III., Overview of the 

Rule, below. 

II. Authority 

A. Legal Authority 

The President issued Executive Order 

13496 pursuant to his authority under 

‘‘the Constitution and laws of the 

United States,’’ expressly including the 

Federal Property and Administrative 

Services Act ‘‘Procurement Act,’’ 40 

U.S.C. 101 et seq. The Procurement Act 

authorizes the President to ‘‘prescribe 

policies and directives that [he] 

considers necessary to carry out’’ the 

statutory purposes of ensuring 

‘‘economical and efficient’’ government 

procurement and supply. 40 U.S.C. 101, 

121(a). Executive Order 13496 delegates 

to the Secretary of Labor the authority 

to ‘‘adopt such rules and regulations 

and issue such orders as are necessary 

and appropriate to achieve the purposes 

of this order.’’ 74 FR at 6108, Sec. 3. The 

Secretary has delegated her authority to 

promulgate these regulations to the 

Assistant Secretary for Employment 

Standards. Secretary’s Order 01–2008 

(May 30, 2008), 73 FR 32424 (published 

June 6, 2008). 

B. Interagency Coordination 

Section 12 of the Executive Order 

requires the Federal Acquisition 

Regulatory Council (FAR Council) to 

take action to implement provisions of 

the Order in the Federal Acquisition 

Regulation (FAR). 74 FR at 6110. 

Accordingly, the Department has 

coordinated with the FAR Council in 

inserting language implementing the 

Executive Order into the FAR. 

III. Overview of the Rule 

The Department’s proposed rule, 

which establishes standards and 

procedures for implementing and 

enforcing Executive Order 13496, is set 

forth in subchapter D, Part 471 of 

Volume 29 of the Code of Federal 

Regulations (CFR). Subpart A of the 

proposed rule sets out definitions, the 

prescribed requirements for the size, 

form and content of the employee 

notice, exceptions for certain types of 

contracts, and exemptions that may be 

applicable to contracting departments 

and agencies with respect to a particular 

contract or subcontract or class of 

contracts or subcontracts. Subpart B of 

the proposed rule sets out standards and 

procedures related to complaint 

procedures, compliance evaluations, 

and enforcement of the rule. Subpart C 

sets out other standards and procedures 

related to certain ancillary matters. The 

discussion below is organized in the 

same manner, and explains the 

Department’s adoption of the standards 

and procedures set out in the regulatory 

text, which follows. The Department 

invites comments on any issues 

addressed by the proposals in this 

rulemaking. 

Subpart A—Definitions, Requirements 

for Employee Notice, and Exceptions 

and Exemptions 

Subpart A contains definitions of 

terms used in the rule, requirements for 

the content, size and form of the notice 

that a contractor must post to its 

employees, the types of contracts that 

are excepted from the rule and 

applicable exemptions available to a 

contracting department or agency with 

respect to a particular contract or 

subcontract or class of contracts or 

subcontracts. 

Definitions 

The definitions proposed in this rule 

are derived largely from the definitions 

of the same terms in the Department’s 

Office of Federal Contract Compliance 

Programs (OFCCP) regulations at 41 CFR 

part 60–1.3 and the former regulations 

implementing Executive Order 13201, 

29 CFR Part 470 (2008), rescinded under 

authority of E.O. 13496, 74 FR 14045 

(March 30, 2009). Slight variations 

between the definitions proposed here 

and those upon which they were 

modeled were made in order to 

accommodate the terms to Executive 

Order 13946. The Department invites 

comments regarding the definitions 

proposed in Section 471.1 below. 

Requirements for Employee Notice 

As noted above, Executive Order 

13496 requires the Secretary to 

‘‘prescribe the size, form and content of 

the notice’’ that contractors must post to 

notify employees of their rights. Sec. 

3(b), E.O. 13496, 74 FR at 6108. The 

proposed rule fulfills the Secretary’s 

obligation to establish standards and 

procedures regarding each of these 

issues, which are discussed in turn 

below. 

Section 471.2(a) of the proposed rule 

sets out in full the four paragraphs that 

the Executive Order requires to be 

included in all non-excepted 

Government contracts. The first 

paragraph of the proposed contract 

clause specifies the content of the notice 

that must be provided to employees of 

Federal contractors. The proposed 

notice contains those employee rights 

established under the National Labor 

Relations Act (‘‘NLRA’’), 29 U.S.C. 151, 

et seq. The Secretary believes providing 

notice of the rights under the NLRA 

bests effectuates the purpose of the 

Executive Order. Section 1 of the 

Executive Order clearly states that the 

Order’s policy is to attain industrial 

peace and enhance worker productivity 

through the notification of workers of 

‘‘their rights under Federal labor laws, 

including the National Labor Relations 

Act.’’ 74 FR at 6107, Sec. 1. The policy 

of the Executive Order goes on to 

emphasize the foundation underlying 

the NLRA, which is to encourage 

collective bargaining and to protect 

workers’ rights to freedom of association 

and self-organization, and notes that 


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1Under the NLRA, the term ‘‘employer’’ excludes 

the United States government, any wholly owned 

government corporation, or any State or political 

subdivision. 29 U.S.C. 152(2). As a result, 

employees of these public-sector employers are not 

‘‘employees’’ covered by the NLRA. The NLRA’s 

definition of ‘‘employee’’ also excludes those 

employed as agricultural laborers, in the domestic 

service of any person or family in a home, by a 

parent or spouse, as an independent contractor, as 

a supervisor, or by an employer subject to the 

Railway Labor Act, such as railroads and airlines. 

29 U.S.C. 152(3). 

efficiency and economy in government 

contracting is promoted when 

contractors inform their employees of 

‘‘such rights.’’ Further, the contract 

clause prescribed by the Order requires 

Federal contractors to post the notice 

‘‘in conspicuous places in and about 

plants and offices where employees 

covered by the National Labor Relations 

Act engage in activities related to 

performance of the contract * * *.’’ 74 

FR at 6107, Sec. 2, Para. 1 (emphasis 

added). As a result, the Executive 

Order’s terms provide that the employee 

notice it requires must be posted only 

by employers in the private sector, with 

some statutory exceptions, and need not 

be posted by employers in the public 

sector.1

In establishing a description of rights 

under the NLRA in the proposed notice, 

the Department believes that such rights 

are best presented to employees 

following a concise preamble that 

provides context to such rights. 

Therefore, section 471.2 of the proposed 

rule sets out the following text for 

inclusion in the notice to employees 

prior to the description of employee 

rights under the NLRA: 

It is the policy of the United States to 

encourage collective bargaining and protect 

the exercise by workers of full freedom of 

association, self-organization, and 

designation of representatives of their own 

choosing, for the purpose of negotiating the 

terms and conditions of their employment or 

other mutual aid and protection. 

The content of the above notice 

derives from section 1 of the NLRA, 29 

U.S.C. 151, and E.O. 13496, Section 1. 

The Department seeks comments on this 

description of policy in the proposed 

section 471.2. 

In proposing to include the statutory 

rights under the NLRA in the required 

notice, the Secretary considered the 

level of detail the notice should contain 

regarding those statutory rights. A broad 

statement of employee rights under the 

NLRA appears in section 7 of the Act, 

which states: 

Employees shall have the right to selforganization, to form, join, or assist labor 

organizations, to bargain collectively through 

representatives of their own choosing, and to 

engage in other concerted activities for the 

purpose of collective bargaining or other 

mutual aid or protection, and shall also have 

the right to refrain from any or all such 

activities * * *. 

29 U.S.C. 157. The Department 

considered requiring a verbatim 

replication of the statute’s enumeration 

of employee rights in Section 7 of the 

NLRA. Alternatively, the Department 

considered including a simplified list of 

rights based upon the statutory 

provision, which would include the 

right of employees to: Organize; form, 

join, or assist any union; bargain 

collectively through representatives of 

their own choice; act together for other 

mutual aid or protection; or choose not 

to engage in any of these protected 

concerted activities. 

However, the Department does not 

believe that posting the statutory 

language itself or a simplified list of 

rights in a notice will be likely to 

convey the information necessary to 

best inform employees of their rights 

under the Act. Instead, the Department 

proposes that the statement of employee 

rights contained in Appendix A to 

Subpart A of Part 471 be required for 

inclusion in the notice. This statement 

contains greater detail of NLRA rights, 

derived from Board or court decisions 

implementing such rights—which will 

more effectively convey such rights to 

employees. A more complete and 

readable text will also better enable 

employees to apply the rights to actual 

workplace situations. Additionally, 

employees will be better apprised of 

their rights under the NLRA if the notice 

also contains examples of general 

circumstances, also derived from Board 

or court decisions further implementing 

section 7 and other provisions of the 

NLRA, that constitute violations of their 

rights under the Act. With the above 

principles in mind, the Department 

devised a notice that provides 

employees with a more than 

rudimentary overview of their rights 

under the NLRA, in a user-friendly 

format, while simultaneously not 

overwhelming employees with 

information that is unnecessary and 

distracting in the limited format of a 

notice. 

The Department invites comment on 

this statement of employee rights 

proposed for inclusion on the required 

notice to employees. In particular, the 

Department requests comment on 

whether the notice contains sufficient 

information of employee rights under 

the Act; whether the notice effectively 

conveys the information necessary to 

best inform employees of their rights 

under the Act; and whether the notice 

achieves the desired balance between 

providing an overview of employee 

rights under the Act and limiting 

unnecessary and distracting 

information. 

Moreover, proposed § 471.2 also 

requires that the notice of employee 

rights contain NLRB contact information 

and basic enforcement procedures to 

enable employees to find out more 

about their rights under the Act and to 

proceed with enforcement if necessary. 

Accordingly, the required notice 

confirms that illegal conduct will not be 

permitted, provides information 

regarding the NLRB and filing a charge 

with that agency, and indicates that the 

Board will prosecute violators of the 

Act. Furthermore, the notice indicates 

that there is a 6-month statute of 

limitations applicable to making 

allegations of violations and provides 

NLRB contact information for use by 

employees. The Department invites 

suggested additions or deletions to these 

procedural provisions that would 

improve the content of the notice of 

employee rights. 

Paragraph 4 of the contract clause in 

the Executive Order requires the 

contractor to incorporate only 

paragraphs 1 through 3 of the clause in 

its subcontracts. See 74 FR at 6108, Sec. 

2, para. 4. A narrow reading of the 

operation of this provision outside the 

full context of the Executive Order 

might suggest that the obligation to 

include the contract clause is limited to 

contracts between the government 

agency and the prime contractor. Under 

this reading, subcontractors would be 

required only to post the notice of 

employee rights, and their 

subcontractors (sometimes called 

second tier contractors) would have no 

responsibilities under the Executive 

Order. However, the provisions of the 

Executive Order establishing 

exemptions and exceptions for the 

application of the Executive Order’s 

obligations do not expressly specify that 

its obligations do not flow past the first 

tier subcontractor, a significant 

limitation that one would expect to be 

made explicitly in the text of the 

Executive Order rather than by 

operation of the contract clause’s 

incorporation provision. In addition, in 

the Department’s past regulatory 

treatment of a similar issue, it has 

adapted through regulation the 

application of an Executive Order’s 

contract inclusion provisions so that the 

obligation to abide by the mandates of 

the orders flows to subcontractors below 

the first tier. See, e.g., 69 FR 16376, 

16378 (Mar. 29, 2004) (final rule 

implementing E.O. 13201) (based on 

identical contract incorporation 

provision, ‘‘the intent of the Order was 

clearly that the clause be passed to 


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subcontractors below the first tier’’); 57 

FR 49588, 49591 (Nov. 2, 1992) (final 

rule implementing E.O. 12800) (‘‘It is 

clear, however, that the intent of 

Executive Order 12800 was that the 

clause flow down below the first tier 

level’’). The Department’s experience 

with regulatory implementation of all 

these Executive Orders is that requiring 

the obligations of the Executive Order to 

flow past the first tier subcontractor best 

achieves the purposes of the Executive 

Orders. For these reasons, the 

Department has concluded that in order 

to fully implement the intent of E.O. 

13496, Sec. 471.2(a) has been adapted to 

require the inclusion of paragraphs 1 

through 4 of the contract clause. The 

Department seeks comments on this 

proposal. 

Proposed § 471.2(b) provides that the 

employee notice clause is to be set out 

verbatim in a contract, subcontract or 

purchase order, rather than being 

incorporated by reference in those 

documents. Proposed § 471.2(c) 

implements Section 3(c) of the 

Executive Order, 74 FR 6108, permitting 

the Secretary to modify the contract 

clause under certain specified 

circumstances as needed from time to 

time. The Department requests comment 

regarding the utility of setting out the 

employee notice clause verbatim, as 

opposed to incorporation by reference, 

to ensure that contractors will be aware 

of their contractual obligation to post 

the required notice. 

The contract clause in the Executive 

Order requires a contractor to post the 

employee notice conspicuously ‘‘in and 

about its plants and offices * * * 

including in all places where notices to 

employees are customarily posted both 

physically and electronically.’’ 74 FR 

6107, Sec. 2, para. 2. As a result, a 

contractor is required to post the notice 

physically at its place of operation 

where employees are likely to see it. 

Proposed § 471.2(d) provides that the 

Department will print the required 

employee notice poster and supply it to 

Federal contractors through the Federal 

contracting agency. In addition, the 

poster may be obtained from OLMS, 

whose contact information is provided 

in this subsection of the proposed rule, 

or can be downloaded from OLMS’s 

Web site, http://www.olms.dol.gov. The 

Secretary has concluded that the 

Department’s printing of the poster and 

provision of it to Federal contractors 

will reduce the burden on those 

contractors to comply with the 

Executive Order and this regulation, and 

will ensure conformity and consistency 

with the Secretary’s specifications for 

the notice. Proposed § 471.2(d) also 

permits contractors to reproduce in 

exact duplicate the poster supplied by 

the Department to satisfy their 

obligations under the Executive Order 

and this rule. The Department invites 

comment on its proposal to make 

available print and electronic format 

posters containing the employee notice. 

Those contractors that customarily 

post notices to employees electronically 

must also post the required notice 

electronically. In § 471.2(e), the 

Department proposes that such 

contractors may satisfy the electronic 

posting requirement on any web site 

that is maintained by the contractor or 

subcontractor and customarily used for 

employee notices, whether external or 

internal. A contractor must display 

prominently on its Web page or 

electronic site where other employee 

notices are customarily placed a link to 

the DOL’s web page that contains the 

full text of the employee notice. The 

contractor must also place the link in 

the prescribed text contained in 

§ 471.2(e). The prescribed text is the 

introductory language of the notice. The 

Department seeks comments on this 

proposal for electronic compliance. In 

addition, the Department seeks 

comment on whether it should prescribe 

standards regarding the size, clarity, 

location, and brightness with regard to 

the link, including how to prescribe 

electronic postings that are at least as 

large, clear and conspicuous as the 

contractor’s other posters. 

Exceptions for Specific Types of 

Contracts and Exemptions Available to 

Contracting Departments or Agencies 

With Respect to Particular Contractors 

or Subcontracts 

The Executive Order expressly 

excepts from its application two types of 

Government contracts: Collective 

bargaining agreements as defined in 5 

U.S.C. 7103(a)(8) and contracts 

involving purchases below the 

simplified acquisition threshold as 

defined in the Office of Federal 

Procurement Policy Act, 41 U.S.C. 403; 

74 FR at 6107, Sec. 2. The simplified 

acquisition threshold is currently set at 

$100,000. 41 U.S.C. 403. Section 

471.3(a)(1) and (2) of the proposed rule 

implement these exceptions. In 

addition, the Executive Order’s 

provision regarding its effective date 

excepts contracts resulting from 

solicitations issued prior to the effective 

date of the final rule promulgated 

pursuant to this rulemaking. 74 FR 

6111, Sec. 16. Proposed § 471.3(a)(3) 

implements this provision of the 

Executive Order. 

As proposed in § 471.2(a), all 

nonexempt prime contractors and 

subcontractors are required to include 

the employee notice contract clause in 

each of their nonexempt subcontracts so 

that the obligation to notify employees 

of their rights flows to subcontractors of 

a government contract as well. The 

Executive Order does not except from 

its coverage subcontracts involving 

purchases below the simplified 

acquisition threshold. The Department 

has defined ‘‘subcontract’’ in the 

definitional section of the rule to 

include only those subcontracts that are 

necessary to the performance of the 

government contract. See § 471.1(r); see 

also OFCCP v. Monongahela R.R., 85– 

OFC–2, 1986 WL 802025 

(Recommended Decision and Order, 

April 2, 1986), aff’d, (Deputy Under 

Secretary’s Final Decision and Order, 

Mar. 11, 1987) (railroad transporting 

coal to power generation plant of energy 

company contracting with GSA was 

subcontractor because delivery of coal is 

necessary to for the power company to 

perform under its contract with GSA). 

Although this rule may result in 

coverage of subcontracts with relatively 

de minimis value in the overall scheme 

of government contracts, covered 

subcontractors include only those who 

are performing subcontracts that are 

necessary to the performance of the 

prime contract. The Department invites 

comment on whether a further 

limitation on the application of the rule 

to subcontracts is necessary, and if it is, 

whether such a limitation is best 

accomplished through the application of 

this or another standard, for instance, a 

threshold related to the monetary value 

of the subcontract. 

In addition to the exceptions for 

certain contracts, the Executive Order 

establishes two exemptions that the 

Secretary, in her discretion, may 

provide to contracting departments or 

agencies that the Secretary finds 

appropriate for exemption. 74 FR 6108, 

Sec. 4. These provisions permit the 

Secretary to exempt a contracting 

department or agency or group of 

departments or agencies from the 

requirements of any or all of the 

provisions of the Order with respect to 

a particular contract or subcontract or 

any class of contracts or subcontracts if 

she finds either that the application of 

any of the requirements of the Order 

would not serve its purposes or would 

impair the ability of the government to 

procure goods or services on an 

economical and efficient basis, or that 

special circumstances require an 

exemption in order to serve the national 

interest. Id. Proposed § 471.3(b) 

implements these exemptions. Proposed 

§ 471.3(b) provides for the submission of 

written requests for exemptions to the 


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Deputy Assistant Secretary for LaborManagement Programs, and further 

provides that the Deputy Assistant 

Secretary may withdraw an exemption 

if a determination is made that such 

action is necessary or appropriate to 

achieve the purposes of the rule. The 

Department invites comments on the 

standards and procedures for requesting 

an exemption and the Department’s 

withdrawal of a granted exemption. 

Finally, proposed § 471.4 implements 

the policy noted above that the 

Executive Order requires notice-posting 

in those workplaces in which 

employees covered by the NLRA 

perform their work under the Federal 

contract. Thus, this rule does not apply 

to employers excluded from the 

definition of ‘‘employer’’ in the NLRA, 

29 U.S.C. 152(2), and employers of 

employees excluded from the definition 

of ‘‘employee’’ under the NLRA, 29 

U.S.C. 152(3). As a result, Federal, State 

and local public-sector employers are 

not covered by this rule. 29 U.S.C. 

152(2). Also excluded are employers of 

workers employed: as agricultural 

laborers; in the domestic service of any 

person or family in a home; by a parent 

or spouse; as an independent contractor; 

as a supervisor; or by an employer 

subject to the Railway Labor Act, such 

as railroads and airlines. 29 U.S.C. 

152(3). 

Subpart B—General Enforcement; 

Compliance Review and Complaint 

Procedures 

Subpart B of the proposed rule 

establishes standards and procedures 

the Department will use to determine 

compliance with obligations of the rule, 

take complaints regarding 

noncompliance, address findings of 

violations, provide hearings for certain 

matters, impose sanctions, including 

debarment, and provide for 

reinstatement in the case of debarment. 

The standards and procedures proposed 

in this subpart are taken largely from the 

Department’s prior rule administering 

and enforcing Executive Order 13201, 

66 FR 11221 (February 22, 2001). See 29 

CFR Part 470 (2008), rescinded under 

authority of E.O. 13496, 74 FR 14045 

(March 30, 2009). The Department 

invites comment on the administrative 

and enforcement procedures proposed 

in Subpart B. 

The Department’s Office of Federal 

Contract Compliance Programs 

(‘‘OFCCP’’) administers and enforces 

several laws that ban discrimination and 

require Federal contractors and 

subcontractors to take affirmative action 

to ensure that all individuals have an 

equal opportunity for employment. 

Therefore, OFCCP already has 

responsibility for monitoring, evaluating 

and ensuring that contractors doing 

business with the Federal government 

conduct themselves in a manner that 

complies with certain Federal laws. 

Proposed § 471.10 builds on this 

practice and expertise, and establishes 

authority in the Deputy Assistant 

Secretary for Federal Contract 

Compliance to conduct evaluations to 

determine whether a contractor is in 

compliance with the requirements of 

this rule. Under proposed § 471.10(a), 

such evaluations may be done solely for 

the purpose of assessing compliance 

with this rule, or may be undertaken in 

conjunction with an assessment of a 

Federal contractors’ compliance with 

other laws under OFCCP’s jurisdiction. 

This proposed section also establishes 

standards regarding location of the 

posted notice that will be used by 

OFCCP to assess compliance and 

indicates that an evaluation record will 

reflect efforts made toward conciliation, 

corrective action and/or 

recommendations regarding 

enforcement actions. 

Proposed § 471.11 provides for the 

Department’s acceptance of written 

complaints alleging that a contractor 

doing business with the Federal 

government has failed to post the notice 

required by this rule. The proposed 

section establishes that no special 

complaint form is required, but that 

complaints must be in writing. In 

addition, as proposed in § 471.11, 

written complaints must contain certain 

information, including the name, 

address and telephone number of the 

person submitting the complaint, and 

the name and address of the Federal 

contractor alleged to have violated this 

rule. This proposed section establishes 

that written complaints may be 

submitted either to OFCCP or OLMS, 

and the contact information for each 

agency is contained in this subsection. 

Finally, proposed § 471.11 establishes 

that OFCCP will conduct investigations 

of complaints submitted under this 

section, make compliance findings 

based on such investigations, and 

include in the investigation record any 

efforts made toward conciliation, 

corrective action, and recommended 

enforcement action, 

Proposed § 471.12 sets out the initial 

steps that the Department will take in 

the event that a contractor is found to 

be in violation of this rule, including 

making reasonable efforts to secure 

compliance through conciliation. Under 

this proposed section, a noncompliant 

contractor must take action to correct 

the violation and commit in writing to 

maintain compliance in the future. If the 

contractor fails to come into 

compliance, OLMS may proceed with 

enforcement efforts proposed in 

§ 471.13. 

Proposed § 471.13 implements 

Section 6 of the Executive Order, 74 FR 

6108–6109, and establishes steps that 

the Department will take in the event 

that conciliation efforts fail to bring a 

contractor into compliance with this 

rule. Under this proposed section, 

enforcement proceedings may be 

initiated if violations are found as a 

result of either a compliance evaluation 

or a complaint investigation, or in those 

cases in which a contractor refuses to 

allow a compliance evaluation or 

complaint investigation or refuses to 

cooperate with the compliance 

evaluation or complaint investigation, 

including failing to provide information 

sought during those procedures. The 

enforcement procedures proposed in 

§ 471.13 rely primarily on the 

Department’s regulations at 29 CFR part 

18, which govern administrative 

hearings before Administrative Law 

Judges (ALJ), and, in particular, on the 

provisions for expedited hearings at 29 

CFR 18.42. The procedures in this 

proposed section establish that an ALJ 

will make recommended findings and 

conclusions regarding any alleged 

violation to the Assistant Secretary for 

Employment Standards (‘‘Assistant 

Secretary’’), who will issue a final 

administrative order. The final 

administrative order may include a 

cease-and-desist order or other 

appropriate remedies in the event that a 

violation is found. The procedures in 

this proposed section also establish 

timetables for submitting exceptions to 

the ALJ’s recommended order to the 

Assistant Secretary, and also provide for 

the use of expedited proceedings. 

Proposed § 471.14 addresses the 

imposition of sanctions and penalties in 

cases in which violations are found, and 

establishes post-hearing procedures 

related to such sanctions or penalties. 

Section 7 of the Executive Order 

provides the framework for the scope 

and nature of remedies the Department 

may order in the event of a violation. 74 

FR 6109. Section 7(a) of the Executive 

Order provides that the Secretary may 

issue a directive that the contracting 

department or agency cancel, terminate, 

suspend, or cause to be cancelled, 

terminated or suspended any contract or 

portion of a contract for noncompliance. 

Id. In addition, the Executive Order 

indicates that contracts may be 

cancelled, terminated or suspended 

absolutely, or their continuance may be 

conditioned on a requirement for future 

compliance. Id. Prior to issuing such a 

directive, the Secretary must offer the 

head of the contracting department or 


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agency an opportunity to object in 

writing to the remedy contemplated, 

and the objections must contain reasons 

why the contract is essential to the 

agency’s mission. Id. Finally, Section 7 

of the Executive Order prevents the 

imposition of such a remedy if the head 

of the contracting department or agency, 

or his or her designee, continues to 

object to the issuance of the directive. 

Id. Proposed § 471.14(a), (b), (c), and 

(d)(1) fully implement the standards and 

procedures established in Section 7(a) of 

the Executive Order. 

Section 7(b) of the Executive Order 

provides that the Secretary may issue an 

order debarring noncompliant 

contractors ‘‘until such contractor has 

satisfied the Secretary that such 

contractor has complied with and will 

carry out the provisions of the order.’’ 

74 FR 6109. As with the remedies 

discussed above, prior to the imposition 

of debarment, the Secretary must offer 

the head of the contracting department 

or agency an opportunity to object in 

writing to debarment, and the objections 

must contain reasons why the contract 

is essential to the agency’s mission. Id. 

Finally, Section 7(b) of the Executive 

Order prevents the imposition of 

debarment if the head of the contracting 

department or agency, or his or her 

designee, continues to object to it. Id. 

Proposed § 471.14(d)(3) of the rule 

establishes the availability of the 

debarment remedy. Section 471.14(f) of 

the proposed rule indicates that the 

Assistant Secretary will periodically 

publish and distribute the names of 

contractors or subcontractors that have 

been debarred for noncompliance. 

Proposed § 471.15 permits a 

contractor or subcontractor to seek a 

hearing before the Assistant Secretary 

before the imposition of any of the 

remedies outlined above. Finally, 

proposed § 471.16 provides contractors 

or subcontractors that have been 

debarred under this rule an opportunity 

to seek reinstatement by requesting such 

in a letter to the Assistant Secretary. 

Under this proposed provision, the 

Assistant Secretary may reinstate the 

debarred contractor or subcontractor if 

he or she finds that the contractor or 

subcontractor has come into compliance 

with this rule and has shown that it will 

fully comply in the future. 

As noted above, § 471.2(a) requires all 

nonexempt prime contractors and 

subcontractors to include the employee 

notice contract clause in each of its 

nonexempt subcontracts so that the 

obligation to notify employees of their 

rights is binding upon each successive 

subcontractor. Regarding enforcement of 

the requirements of the rule as to 

subcontractors, the Executive Order 

requires the contractor to ‘‘take such 

action with respect to any such 

subcontract as may be directed by the 

Secretary of Labor as a means of 

enforcing such provisions, including 

sanctions for noncompliance.’’ 74 FR 

6108, Sec. 2, para. 4. Accordingly, in the 

event that the Department determines 

that a subcontractor is out of 

compliance with the requirements of 

this rule regarding employee notice or 

inclusion of the contract clause in the 

subcontractor’s own subcontracts, the 

Secretary may direct the contractor to 

require the noncompliant subcontractor 

to come into compliance. As indicated 

in the Executive Order, if such a 

directive causes the contractor to 

become involved in litigation with the 

subcontractor, the contractor may 

request the United States to enter the 

litigation in order to protect the interests 

of the United States. 74 FR 6108, Sec. 

2, para. 4. If the contractor is unable to 

compel subcontractor compliance on its 

own accord, the compliance review, 

complaint, investigation, conciliation, 

hearing and decision procedures 

established in Sections 471.10 through 

471.16 to assess and resolve contractor 

compliance with the requirements of 

this rule are also applicable to 

subcontractors. In those instances in 

which a contractor fails to take the 

action directed by the Secretary 

regarding a subcontractor’s 

noncompliance, the contractor may be 

subject to the same enforcement and 

remedial procedures that apply when it 

is determined to be out of compliance 

regarding the requirements to provide 

employee notice or include the contract 

clause in its contracts. See 

§ 471.13(a)(1). 

Subpart C—Ancillary Matters 

A number of discrete issues 

unconnected to the issues addressed in 

the two previous subparts merit 

attention in this proposed rule, and they 

are set out in this subpart. 

Consequently, this Subpart addresses 

delegations of authority within and 

outside the Department to administer 

and enforce this proposed rule, rulings 

under or interpretations of the Executive 

Order, standards prohibiting 

intimidation, threats, coercion or other 

interference with rights protected under 

this rule, and other provisions of the 

Executive Order that are included in 

this proposed rule. The Department 

invites comment on any issues 

addressed in this subpart. 

Proposed § 471.20 implements 

Section 11 of the Executive Order, 74 FR 

6110, which permits the delegation of 

the Secretary’s authority under the 

Order to Federal agencies within or 

outside the Department. Section 471.21 

of the proposed rule indicates that the 

Assistant Secretary has authority to 

make rulings under or interpretations of 

this rule. Proposed § 471.22 seeks to 

prevent intimidation or interference 

with rights protected under this rule, so 

it proposes that the sanctions and 

penalties available for noncompliance 

set out in § 471.14 be available should 

a contractor or subcontractor fail to take 

all steps necessary to prevent such 

intimidation or interference. Activities 

protected by this proposed section 

include filing a complaint, furnishing 

information, or assisting or participating 

in any manner in a compliance 

evaluation, a complaint investigation, 

hearing or any other activity related to 

the administration and enforcement of 

this rule. Finally, proposed § 471.23 

implements Section 9 of the Executive 

Order, 74 FR 6109, which requires that 

contracting departments and agencies 

cooperate with the Secretary in carrying 

out her functions under the Order, and 

implements Section 15 of the Executive 

Order, 74 FR 6110, which establishes 

general guidelines for the Order’s 

implementation. 

IV. Regulatory Procedures 

Executive Order 12866 

This proposed rule has been drafted 

and reviewed in accordance with 

Executive Order 12866, section 1(b), 

Principles of Regulation. 58 FR 51735, 

51735–51736. The Department has 

determined that this rule is not an 

‘‘economically significant’’ regulatory 

action under section 3(f)(1) of Executive 

Order 12866. 58 FR 51738. Based on the 

Department’s analysis, including a cost 

impact analysis set forth more fully 

below with regard to the Regulatory 

Flexibility Act, 5 U.S.C. 601 et seq., this 

rule is not likely to: (1) Have an annual 

effect on the economy of $100 million 

or more or adversely affect in a material 

way the economy, a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or state, local, or tribal 

governments or communities; (2) create 

a serious inconsistency or otherwise 

interfere with an action taken or 

planned by another agency; (3) 

materially alter the budgetary impact of 

entitlements, grants, user fees, or loan 

programs or the rights and obligations of 

recipients thereof, or (4) raise novel 

legal or policy issues. 58 FR 51738. As 

a result, the Department has concluded 

that a full economic impact and cost/ 

benefit analysis is not required for the 

rule under section 6(a)(3)(B) of the 

Executive Order. 58 FR 51741. However, 

because of its importance to the public, 


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2The Federal Funding Accountability and 

Transparency Act of 2006, Pub.L. 109–282, (Sept. 

26, 2006), requires that the Office of Management 

and Budget establish a single searchable Web site, 

accessible by the public for free, that includes for 

each Federal award, among other things: (1) The 

name of the entity receiving the award; (2) the 

amount of the award; (3) information on the award 

including transaction type, funding agency, etc.; (4) 

the location of the entity receiving the award; and 

(5) a unique identifier of the entity receiving the 

award. See 31 U.S.C.A. § 6101 note. In compliance 

with this requirement, USASpending.gov was 

established. 

3The Federal Procurement Data System compiles 

data regarding small business ‘‘actions’’ and small 

business ‘‘dollars’’ using the criteria employed by 

SBA to define ‘‘small entities.’’ In FY 2008, small 

business actions accounted for 50% of all Federal 

procurement action. However, deriving a 

percentage of contractors that are small using the 

‘‘action’’ data would overstate the number of small 

contractors because contract actions reflect more 

than just contracts; they include modifications, 

blanket purchase agreement calls, task orders, and 

federal supply schedule orders. As a result, there 

are many more contract actions than there are 

contracts or contractors. Accordingly, a single small 

contractor might have hundreds of actions, e.g., 

delivery or task orders, placed against its contract. 

These contract actions would be counted 

individually in the FPDS, but represent only one 

small business. 

Also reflected in FPDS, in FY 2008, small 

business ‘‘dollars’’ accounted for 19% of all Federal 

dollars spent. However, deriving a percentage of 

contractors that are small using the ‘‘dollars’’ data 

would understate the number of small contractors. 

Major acquisitions account for a disproportionate 

share of the dollar amounts and are almost 

exclusively awarded to large businesses. For 

instance, Lockheed Martin was awarded $34 billion 

in contracts in FY 2008, which accounted for 6% 

of all Federal spending in that year. The top five 

federal contractors, all large businesses, accounted 

for over 20% of contract dollars in FY 2008. As a 

result, because the largest Federal contractors 

disproportionately represent ‘‘dollars’’ spent by the 

the rule was reviewed by the Office of 

Management and Budget. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act of 

1980, 5 U.S.C. 601 et seq., requires 

agencies promulgating proposed rules to 

prepare an initial regulatory flexibility 

analysis and to develop alternatives 

wherever possible, when drafting 

regulations that will have a significant 

impact on a substantial number of small 

entities. The focus of the RFA is to 

ensure that agencies ‘‘review rules to 

assess and take appropriate account of 

the potential impact on small 

businesses, small governmental 

jurisdictions, and small organizations, 

as provided by the [RFA].’’ Executive 

Order 13272, Sec. 1, 67 FR 53461 

(‘‘Proper Consideration of Small Entities 

in Agency Rulemaking’’). However, an 

agency is relieved of the obligation to 

prepare an initial regulatory flexibility 

for a proposed rule if the Agency head 

certifies that the rule will not, if 

promulgated, have a significant 

economic impact on a substantial 

number of small entities. 5 U.S.C 605. 

Based on the analysis below, in which 

the Department has estimated the 

financial burdens to covered small 

contractors and subcontractors 

associated with complying with the 

requirements contained in this proposed 

rule, the Department has certified to the 

Chief Counsel for Advocacy of the Small 

Business Administration (SBA) that this 

rule will not have a significant 

economic impact on a substantial 

number of small entities. 

The primary goal of the Executive 

Order and these implementing 

regulations is the notification to 

employees of their rights with respect to 

collective bargaining and other 

protected, concerted activity. This goal 

is achieved through the incorporation of 

a contract clause in all covered 

Government contracts. The Executive 

Order and this rule impose the 

obligation to ensure that the contract 

clause is included in all Government 

contracts not on private contractors, but 

on Government contracting departments 

and agencies, which are not ‘‘small 

entities’’ that come within the focus of 

the RFA. Therefore, the costs attendant 

to learning of the obligation to include 

the contract clause in Government 

contracts and modifying those contracts 

in order to comply with that obligation 

is a cost borne by the Federal 

government, and is not incorporated 

into this analysis. 

Once the required contract clause is 

included in the Government contract, 

contractors then begin to assume the 

burdens associated with compliance. 

Those obligations include posting the 

required notice and incorporating the 

contract clause into all covered 

subcontracts, thus making the same 

obligations binding on covered 

subcontractors. For the purposes of this 

analysis, the Department estimates that, 

on average, each prime contractor will 

subcontract some portion of its prime 

contract three times, and the prime 

contractor therefore will expend time 

ensuring that the contract clause is 

included in its subcontracts and 

notifying those subcontractors of their 

attendant obligations. To the extent that 

subcontractors subcontract any part of 

their contract with the prime contractor, 

they, in turn, will be required to expend 

time ensuring that the contract clause is 

included in the next tier of subcontracts 

and notifying the next-tier 

subcontractors of their attendant 

obligations. Therefore, for the purpose 

of determining time spent on 

compliance, the Department will not 

differentiate between the obligations of 

prime contractors and subsequent tiers 

of subcontractors in assessing time 

spent on compliance; the Department 

assumes that all contractors, whether 

prime contractor or subcontractor, will 

spend equivalent amounts of time 

engaging in compliance activity. 

The Department estimates that each 

contractor will spend a total of 3.5 hours 

per year in order to comply with this 

rule, which includes 90 minutes for the 

contractor to learn about the contract 

and notice requirements, train staff, and 

maintain records; 30 minutes for 

contractors to incorporate the contract 

clause into each subcontract and 

explain its contents to subcontractors; 

30 minutes acquiring the notice from a 

government agency or Web site; and 60 

minutes posting them physically and 

electronically, depending on where and 

how the contractor customarily posts 

notices to employees. The Department 

assumes that these activities will be 

performed by a professional or business 

worker, who, according to Bureau of 

Labor statistics data, earned a total 

hourly wage of $31.02 in January, 2009, 

including accounting for fringe benefits. 

The Department then multiplied this 

figure by 3.5 hours to estimate the 

average annual costs for contractors and 

subcontractors to comply with this rule. 

Accordingly, this proposed rule is 

estimated to impose average annual 

costs of $108.57 per contractor (3.5 

hours × $31.02). These costs will 

decrease in subsequent years based on 

a contractor’s increasing familiarity with 

the rule’s requirements and having 

already satisfied its posting 

requirements in earlier years. 

Based upon figures obtained from 

USASpending.gov, which compiles 

information on federal spending and 

contractors across government agencies, 

the Department concludes that there 

were 186,536 unique Federal 

contractors holding Federal contracts in 

FY 2008.2 Although this rule does not 

apply to Federal contracts below the 

simplified acquisition threshold, the 

Department does not have a means by 

which to calculate what portion of all 

Federal contractors hold only contracts 

with the government below the 

simplified acquisition threshold to 

which the rule would not apply in any 

respect. Therefore, in order to determine 

the number of entities affected by this 

rule, the Department used all Federal 

contractors as a basis, regardless of the 

size of the government contract held. 

Based on data analyzed in the Federal 

Procurement Data System (fpds.gov), 

which compiles data about types of 

contractors, of all 186,536 unique 

Federal prime contractors, 

approximately 35% are ‘‘small entities’’ 

as defined by the Small Business 

Administration (SBA) size standards.3


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Federal government, the FPDB’s data on small 

‘‘dollars’’ spent understates the number of small 

entities with which the Federal government does 

business. 

The Department concludes that the percentage of 

all Federal contractors that are ‘‘small’’ is probably 

somewhere between 19% and 50%, the two 

percentages derived from the FPDS figures on small 

‘‘actions’’ and small ‘‘dollars.’’ The mean of these 

two percentages is approximately 35%, and the 

Department will use this figure above to estimate 

how many of all Federal contractors are ‘‘small 

entities’’ in SBA’s terms. 

Therefore, for the purposes of the RFA 

analysis, the Department estimates that 

this rule will affect 65,288 small Federal 

prime contractors. 

As noted above, for the purposes of 

this analysis, the Department estimates 

that each prime contractor subcontracts 

a portion of the prime contract three 

times, on average. However, the 

community of prime contractors does 

not utilize a unique subcontractor for 

each subcontract; the Department 

assumes that subcontractors may be 

working under several prime contracts 

for either a single prime contractor or 

multiple prime contractors, or both. In 

addition, some subcontractors may also 

be holding prime contracts with the 

government, so they may already be 

counted as affected entities. Therefore, 

in order to determine the unique 

number of subcontractors affected by 

this rule, the Department estimates there 

are the same number of unique 

subcontractors as prime contractors, 

resulting in the estimate that 186,536 

subcontractors are affected by this rule. 

Further, for the purposes of this 

analysis, the Department assumes that 

all subcontractors are ‘‘small entities’’ as 

defined by SBA size standards. 

Therefore, in order to estimate the total 

number of ‘‘small’’ contractors affected 

by this rule, the Department has added 

together the estimates for the number of 

small prime contractors calculated 

above (65,288) with the estimate of all 

subcontractors (186,536), all of which 

we assume are small. Accordingly, the 

Department estimates that 251,824 small 

prime and subcontractors are affected by 

this rule. 

Based on this analysis, the 

Department concludes that this 

proposed rule will not have a significant 

economic impact on a substantial 

number of small entities. The 

Regulatory Flexibility Act does not 

define either ‘‘significant economic 

impact’’ or ‘‘substantial’’ as it relates to 

the number of regulated entities. 5 

U.S.C. 601. In the absence of specific 

definitions, ‘‘what is ‘significant’ or 

‘substantial’ will vary depending on the 

problem that needs to be addressed, the 

rule’s requirements, and the preliminary 

assessment of the rule’s impact.’’ See A 

Guide for Government Agencies: How to 

Comply with the Regulatory Flexibility 

Act, Office of Advocacy, U.S. Small 

Business Administration at 17, available 

at http://www.sba.gov. As to economic 

impact, one important indicator is the 

cost of compliance in relation to 

revenue of the entity or the percentage 

of profits affected. Id. In this case, the 

Department has determined that the 

average cost of compliance with this 

rule in the first year for all Federal 

contractors and subcontractors will be 

$108.57. The Department concludes that 

this economic impact is not significant. 

Furthermore, the Department has 

determined that of the entire regulated 

community of all 186,536 prime 

contractors and all 186,536 

subcontractors, 67% percent of that 

regulated community constitute small 

entities (251,824 small contractors 

divided by all 373,072 contractors). 

Although this figure represents a 

substantial number of federal 

contractors and subcontractors, because 

Federal contractors are derived from 

virtually all segments of the economy 

and across industries, this figure is a 

small portion of the national economy 

overall. Id. at 20 (‘‘the substantiality of 

the number of businesses affected 

should be determined on an industryspecific basis and/or the number of 

small businesses overall’’). Accordingly, 

the Department concludes that the rule 

does not impact a substantial number of 

small entities in a particular industry or 

segment of the economy. Therefore, 

under 5 U.S.C. 605, the Department 

concludes that the proposed rule will 

not have a significant economic impact 

on a substantial number of small 

entities. 

Unfunded Mandates Reform 

For purposes of the Unfunded 

Mandates Reform Act of 1995, this 

proposed rule would not include any 

Federal mandate that might result in 

increased expenditures by State, local, 

and tribal governments, or increased 

expenditures by the private sector of 

more than $100 million in any one year. 

Paperwork Reduction Act 

Certain sections of this proposed rule, 

including § 471.11(a) and (b), contain 

information collection requirements for 

purposes of the Paperwork Reduction 

Act of 1995 (44 U.S.C. 3501 et seq.) 

(PRA). As required by the PRA, the 

Department has submitted a copy of 

these sections to OMB for its review. 

The proposed rule requires 

contractors to post notices and 

cooperate with any investigation into a 

failure to comply with the requirements 

of part 471 as the result of a complaint 

or a compliance evaluation. It also 

permits employees to file complaints 

with the Department alleging that a 

contractor has failed to comply with 

those requirements. The application of 

the PRA to those requirements is 

discussed below. 

The proposed rule imposes certain 

minimal burdens associated with the 

posting of the employee notice poster 

required by the Executive Order and 

§ 471.2(a). As noted in § 471.2(e), the 

Department will supply the notice, and 

contractors will be permitted to post 

exact duplicate copies of the notice. 

Under the regulations implementing the 

PRA, ‘‘[t]he public disclosure of 

information originally supplied by the 

Federal government to [a] recipient for 

the purpose of disclosure to the public’’ 

is not considered a ‘‘collection of 

information’’ under the Act. See 5 CFR 

1320.3(c)(2). Therefore, the posting 

requirement is not subject to the PRA. 

The proposed rule would also impose 

certain burdens on the contractor 

associated with cooperating with an 

investigation into failure to comply with 

the requirements of part 471 as the 

result of a complaint or in connection 

with a compliance evaluation. The 

regulations implementing the PRA 

exempt any information collection 

requirements imposed by an 

administrative agency during the 

conduct of an administrative action 

against specific individuals or entities. 

See 5 CFR 1320.4. Once the agency 

opens a case file or equivalent about a 

particular party, this exception applies 

during the entire course of the 

investigation, before or after formal 

charges or complaints are filed or formal 

administrative action is initiated. Id. 

Therefore, this exemption would apply 

to the Department’s investigation of 

complaints alleging violations of the 

Order or this proposed rule as well as 

compliance evaluations. 

As for the burden hour estimate for 

employees filing complaints, we 

estimate, based on the experience of the 

Office of Federal Contract Compliance 

Programs (OFCCP) administering other 

laws applicable to Federal contractors, 

that it will take an average of 1.28 hours 

for such a complainant to compose a 

complaint containing the necessary 

information and to send that complaint 

to the Department. This number is also 

consistent with the burden estimate for 

filing a complaint under E.O. 13201 and 

the now-revoked part 470 regulations. 

The Department has estimated it 

would receive a total of 50 employee 

complaints in any given year, which is 

significantly larger than the estimate 

contained its most recent PRA 

submission for E.O. 13201. In that 


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submission, the Department estimated it 

would receive 20 employee complaints. 

This number itself had been revised 

downwards because the Department 

never received any employee 

complaints pursuant to the now-revoked 

29 CFR part 470 regulations. Because 

the applicability of the proposed rule 

and E.O. 13496 is greater in scope than 

the now-revoked part 470 and E.O. 

13201 in terms of geography (the nowrevoked part 470 regulations only 

applied to states without right-to-work 

laws, whereas the proposed rule applies 

nationwide), the Department has revised 

upwards its estimate of employee 

complaints under the proposed rule 

from 20 to 50. In addition, E.O. 13201 

required the posting of a notice 

containing information of interest to 

only a few—employees who may have 

objected to paying union dues or fees for 

non-representational activities—while 

the information in the poster required 

by this regulation should be of interest 

to all employees. 

The Department calculated the 

estimates of annualized cost to 

respondents for the hour burdens 

associated with this collection of 

information. Specifically, it used the 

data from the Bureau of Labor Statistics 

(BLS) National Compensation Survey: 

Occupation Wages in the United States 

(NCS), 2007 (Bulletin 2704), to calculate 

the cost of the burden hours associated 

with employee complaints. The NCS 

Bulletin indicates that the average 

hourly wage for all workers during 

2007, the most recent year available, 

was $19.88 per hour. Therefore, we 

estimate that the cost to a complainant 

of filing a complaint under E.O. 13496 

will be $25.92, or $25.45 ($19.88 × 1.28) 

+ $0.47 for postage and envelope ($0.44 

postage and $0.03 for the envelope). We 

further estimate, as stated above, that 50 

individual complaints will be filed each 

year. Therefore, we project that this 

collection of information will impose on 

employees who file complaints a total 

annual cost burden of $1,296.00 ($25.92 

per complaint × 50 complaints). 

Proposed § 471.3(b) permits 

contracting departments to submit 

written requests for an exemption from 

the obligations of the Executive Order 

(waiver request) as to particular 

contracts or classes of contracts under 

specified circumstance. The PRA does 

not cover the costs to the Federal 

government for the submission of 

waiver requests by contracting agencies 

or departments or for the processing of 

waiver requests by the Department of 

Labor. The regulations implementing 

the PRA define the term ‘‘burden,’’ in 

pertinent part, as ‘‘the total time, effort, 

or financial resources expended by 

persons to generate, maintain, retain, or 

disclose or provide information to or for 

a Federal agency.’’ 5 CFR 1320.3(b)(1). 

The definition of the term ‘‘person’’ in 

the same regulations includes ‘‘an 

individual, partnership, association, 

corporation (including operations of 

government-owned contractor-operated 

facilities), business trust, or legal 

representative, an organized group of 

individuals, a State, territorial, tribal, or 

local government or branch thereof, or 

a political subdivision of a State, 

territory, tribal, or local government or 

a branch of a political subdivision.’’ 5 

CFR 1320.3(k). It does not include the 

Federal government or any branch, 

political subdivision, or employee 

thereof. Therefore, the cost to the 

Federal government for the submission 

of waiver requests by contracting 

agencies and departments need not be 

taken into consideration. 

The Department invites the public to 

comment on whether each of the 

proposed collections of information: (1) 

Ensures that the collection of 

information is necessary to the proper 

performance of the agency, including 

whether the information will have 

practical utility; (2) estimates the 

projected burden, including the validity 

of the methodology and assumptions 

used, accurately; (3) enhances the 

quality, utility, and clarity of the 

information to be collected; and (4) 

minimizes the burden of the collection 

of information on those who are to 

respond, including through the use of 

appropriate automated, electronic, 

mechanical, or other technological 

collection techniques or other forms of 

information technology (e.g., permitting 

electronic submission of responses). 

Comments must be submitted by 

September 2, 2009 to: Desk Officer for 

the Department of Labor, Office of 

Management and Budget, 725 17th 

Street, NW., Washington, DC 20503. 

Executive Order 13132 (Federalism) 

The Department has reviewed this 

proposed rule in accordance with 

Executive Order 13132 regarding 

federalism, and has determined that the 

proposed rule does not have ‘‘federalism 

implications.’’ The employee notice 

required by the Executive Order and 

part 471 must be posted only by 

employers covered under the NLRA. 

Therefore, the proposed rule does not 

‘‘have substantial direct effects on the 

States, on the relationship between the 

national government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government.’’ 

Executive Order 13084 (Consultation 

and Coordination With Indian Tribal 

Governments) 

The Department certifies that this 

Proposed Rule does not impose 

substantial direct compliance costs on 

Indian tribal governments. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 

This proposed rule is not a major rule 

as defined by section 804 of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996. This rule will not 

result in an annual effect on the 

economy of $100,000,000 or more; a 

major increase in costs or prices; or 

significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of the United States-based 

companies to compete with foreignbased companies in domestic and 

export markets. 

Request for Comments 

This proposed rule would implement 

Executive Order 13496. The Department 

invites comments about the NPRM from 

interested parties, including current and 

potential Government contractors, 

subcontractors, and vendors, and 

current and potential employees of such 

entities; labor organizations; public 

interest groups; Federal contracting 

agencies; and the public. 

List of Subjects in 29 CFR Part 471 

Administrative practice and 

procedure, Government contracts, 

employee rights, Labor unions. 

Text of Proposed Rule 

Accordingly, a new Subchapter D, 

consisting of Part 471, is proposed to be 

added to 29 CFR Chapter IV to read as 

follows: 

Subchapter D. Notification of Employee 

Rights Under Federal Labor Laws 

PART 471—OBLIGATIONS OF 

FEDERAL CONTRACTORS AND 

SUBCONTRACTORS; NOTIFICATION 

OF EMPLOYEE RIGHTS UNDER 

FEDERAL LABOR LAWS 

Subpart A—Definitions, Requirements 

for Employee Notice, and Exceptions 

and Exemptions 

Sec. 

471.1 What definitions apply to this part? 

471.2 What employee notice clause must be 

included in Government contracts? 

471.3 What exceptions apply and what 

exemptions are available? 

471.4 What employers are not covered 

under the rule? 

Appendix A to Subpart A of Part 471—Text 

of Employee Notice Clause 


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Appendix B to Subpart A of Part 471— 

Electronic Link Language 

Subpart B—General Enforcement; 

Compliance Review and Complaint 

Procedures 

471.10 How will the Department determine 

whether a contractor is in compliance 

with Executive Order 13496 and this 

part? 

471.11 What are the procedures for filing 

and processing a complaint? 

471.12 What are the procedures to be 

followed when a violation is found 

during a complaint investigation or 

compliance evaluation? 

471.13 Under what circumstances, and 

how, will enforcement proceedings 

under Executive Order 13496 be 

conducted? 

471.14 What sanctions and penalties may 

be imposed for noncompliance, and 

what procedures will the Department 

follow in imposing such sanctions and 

penalties? 

471.15 Under what circumstances must a 

contractor be provided the opportunity 

for a hearing? 

471.16 Under what circumstances may a 

contractor be reinstated? 

Subpart C—Ancillary Matters 

471.20 What authority under this part or 

Executive Order 13496 may the Secretary 

delegate, and under what circumstances? 

471.21 Who will make rulings and 

interpretations under Executive Order 

13496 and this part? 

471.22 What actions may the Assistant 

Secretary take in the case of intimidation 

and interference? 

471.23 What other provisions apply to this 

part? 

Authority: 40 U.S.C. 101 et seq.; Executive 

Order 13496, 74 FR 6107 (February 4, 2009); 

Secretary’s Order 01–2008, 73 FR 32424 

(June 6, 2008). 

Subpart A—Definitions, Requirements 

for Employee Notice, and Exceptions 

and Exemptions 

§ 471.1 What definitions apply to this part? 

Assistant Secretary means the 

Assistant Secretary for Employment 

Standards, United States Department of 

Labor, or his or her designee. 

Collective bargaining agreement 

means an agreement, as defined in the 

Federal Service Labor-Management 

Relations Statute, entered into by an 

agency and the exclusive representative 

of employees in an appropriate unit to 

set terms and conditions of employment 

of those employees. 

Construction means the construction, 

rehabilitation, alteration, conversion, 

extension, demolition, weatherization, 

or repair of buildings, highways, or 

other changes or improvements to real 

property, including facilities providing 

utility services. The term construction 

also includes the supervision, 

inspection, and other on-site functions 

incidental to the actual construction. 

Construction work site means the 

general physical location of any 

building, highway, or other change or 

improvement to real property which is 

undergoing construction, rehabilitation, 

alteration, conversion, extension, 

demolition, or repair, and any 

temporary location or facility at which 

a contractor or subcontractor meets a 

demand or performs a function relating 

to the contract or subcontract. 

Contract means, unless otherwise 

indicated, any Government contract or 

subcontract. 

Contracting agency means any 

department, agency, establishment, or 

instrumentality in the executive branch 

of the Government, including any 

wholly owned Government corporation, 

that enters into contracts. 

Contractor means, unless otherwise 

indicated, a prime contractor or 

subcontractor. 

Department means the U.S. 

Department of Labor. 

Employee notice clause means the 

contract clause that Government 

contracting departments and agencies 

must include in all Government 

contracts and subcontracts pursuant to 

Executive Order 13496 and this part. 

Government means the Government of 

the United States of America. 

Government contract means any 

agreement or modification thereof 

between any contracting agency and any 

person for the purchase, sale, or use of 

personal property or non-personal 

services. The term ‘‘personal property,’’ 

as used in this section, includes 

supplies, and contracts for the use of 

real property (such as lease 

arrangements), unless the contract for 

the use of real property itself constitutes 

real property (such as easements). The 

term ‘‘non-personal services’’ as used in 

this section includes, but is not limited 

to, the following services: Utilities, 

construction, transportation, research, 

insurance, and fund depository. The 

term Government contract does not 

include: 

(1) Agreements in which the parties 

stand in the relationship of employer 

and employee; and 

(2) Federal financial assistance, as 

defined in 29 CFR 31.2. 

Labor organization means any 

organization of any kind in which 

employees participate and which exists 

for the purpose, in whole or in part, of 

dealing with employers concerning 

grievances, labor disputes, wages, rates 

of pay, hours, or other terms or 

conditions of employment. 

Modification of a contract means any 

alteration in the terms and conditions of 

that contract, including amendments, 

renegotiations, and renewals. 

Order or Executive Order means 

Executive Order 13496 (74 FR 6107, 

January 30, 2009). 

Person means any natural person, 

corporation, partnership, 

unincorporated association, State or 

local government, and any agency, 

instrumentality, or subdivision of such 

a government. 

Prime contractor means any person 

holding a contract with a contracting 

agency, and, for the purposes of 

subparts B and C of this part, includes 

any person who has held a contract 

subject to the Executive Order and this 

part. 

Related rules, regulations, and orders 

of the Secretary of Labor, as used in 

§ 471.2 of this part, means rules, 

regulations, and relevant orders of the 

Assistant Secretary for Employment 

Standards, or his or her designee, issued 

pursuant to the Executive Order or this 

part. 

Secretary means the Secretary of 

Labor, U.S. Department of Labor, or his 

or her designee. 

Simplified acquisition threshold 

means the dollar amount set by 

Congress under the Office of Federal 

Policy Procurement Act. As indicated in 

this Part, government contracts valued 

below the dollar amount set in the 

Simplified Acquisition Threshold are 

not subject to this Part. 

Subcontract means any agreement or 

arrangement between a contractor and 

any person (in which the parties do not 

stand in the relationship of an employer 

and an employee): 

(1) For the purchase, sale or use of 

personal property or non-personal 

services that, in whole or in part, is 

necessary to the performance of any one 

or more contracts; or 

(2) Under which any portion of the 

contractor’s obligation under any one or 

more contracts is performed, undertaken 

or assumed. 

Subcontractor means any person 

holding a subcontract and, for the 

purposes of subparts B and C of this 

part, any person who has held a 

subcontract subject to the Executive 

Order and this part. 

Union means a labor organization as 

defined in paragraph (k) of this section. 

United States, as used herein, shall 

include the several States, the District of 

Columbia, the Virgin Islands, the 

Commonwealth of Puerto Rico, Guam, 

American Samoa, the Commonwealth of 

the Northern Mariana Islands, and Wake 

Island. 


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§ 471.2 What employee notice clause must 

be included in Government contracts? 

(a) Government contracts. With 

respect to all contracts covered by this 

part, Government contracting 

departments and agencies shall, to the 

extent consistent with law, include the 

language set forth in Appendix A to 

Subpart A of Part 471 in every 

Government contract, other than 

collective bargaining agreements as 

defined in § 471.1 and purchase orders 

under the simplified acquisition 

threshold as defined in § 471.1. 

(b) Inclusion by reference not 

permitted. The employee notice clause 

must be quoted verbatim in a contract, 

subcontract, or purchase order. The 

clause may not be made part of the 

contract, subcontract, or purchase order 

by words of incorporation or inclusion. 

(c) Adaptation of language. Whenever 

the Assistant Secretary finds that an Act 

of Congress, clarification of existing law 

by the courts or the National Labor 

Relations Board, or other circumstances 

make modification of the contractual 

provisions necessary to achieve the 

purposes of Executive Order 13496 and 

this part, the Assistant Secretary 

promptly shall issue such rules, 

regulations, or orders as are needed to 

cause the substitution or addition of 

appropriate contractual provisions in 

Government contracts thereafter entered 

into. 

(d) Obtaining employee notice poster. 

The required employee notice poster, 

printed by the Department, will be 

provided by the Federal contracting 

agency or may be obtained from the 

Division of Interpretations and 

Standards, Office of Labor-Management 

Standards, U.S. Department of Labor, 

200 Constitution Avenue, NW., Room 

N–5609, Washington, DC 20210, or from 

any field office of the Department’s 

Office of Labor-Management Standards 

or Office of Federal Contract 

Compliance Programs. A copy of the 

poster may also be downloaded from the 

Office of Labor-Management Standards 

Web site at http://www.olms.dol.gov. 

Additionally, contractors may 

reproduce and use exact duplicate 

copies of the Department’s official 

poster. 

(e) Electronic postings of employee 

notice poster. A contractor or 

subcontractor that customarily posts 

notices to employees electronically 

must also post the required notice 

electronically. Such contractors or 

subcontractors satisfy the electronic 

posting requirement by displaying 

prominently on any Web site that is 

maintained by the contractor or 

subcontractor and customarily used for 

employee notices, whether external or 

internal, a link to the Department of 

Labor’s Web site that contains the full 

text of the poster. The language that 

must constitute the link is contained in 

Appendix B to Subpart A to Part 471. 

§ 471.3 What exceptions apply and what 

exemptions are available? 

(a) Exceptions for specific types of 

contracts. The requirements of this part 

do not apply to 

(1) Collective bargaining agreements 

as defined in § 471.1. 

(2) Government contracts that involve 

purchases below the simplified 

acquisition threshold as defined in 

§ 471.1. Therefore, the employee notice 

clause need not be included in contracts 

for purchases below that threshold, 

provided that: 

(i) No agency or contractor is 

permitted to procure supplies or 

services in a way designed to avoid the 

applicability of the Order and this part; 

and 

(ii) The employee notice clause must 

be included in contracts and 

subcontracts for indefinite quantities, 

unless the contracting agency or 

contractor has reason to believe that the 

amount to be ordered in any year under 

such a contract or subcontract will be 

less than the simplified acquisition 

threshold. 

(3) Government contracts resulting 

from solicitations issued prior to the 

date of the effective date of this rule. 

(b) Exemptions for certain contracts. 

The Deputy Assistant Secretary for 

Labor-Management Programs may 

exempt a contracting agency department 

or agency or groups of departments or 

agencies from the requirements of this 

part with respect to a particular contract 

or subcontract or any class of contracts 

or subcontracts when the Deputy 

Assistant Secretary finds that: 

(1) The application of any of the 

requirements of this part would not 

serve its purposes or would impair the 

ability of the Government to procure 

goods or services on an economical and 

efficient basis; or 

(2) Special circumstances require an 

exemption in order to serve the national 

interest. 

(c) Procedures for requesting an 

exemption and withdrawals of 

exemptions. Requests for exemptions 

under this subsection from an agency or 

department must be in writing, and 

must be directed to the Deputy Assistant 

Secretary for Labor-Management 

Programs, U.S. Department of Labor, 

200 Constitution Avenue, NW., Room 

N–5603, Washington, DC 20210. The 

Deputy Assistant Secretary for LaborManagement Programs may withdraw 

an exemption granted under this section 

when, in the Deputy Assistant 

Secretary’s judgment, such action is 

necessary or appropriate to achieve the 

purposes of this part. 

§ 471.4 What employers are not covered 

under this part? 

(a) The following employers are 

excluded from the definition of 

‘‘employer’’ in the National Labor 

Relations Act (NLRA), and are not 

covered by the requirements of this part: 

(1) The United States or any wholly 

owned Government corporation; 

(2) Or any Federal Reserve Bank; 

(3) Or any State or political 

subdivision thereof, or any person 

subject to the Railway Labor Act; 

(4) Or any labor organization (other 

than when acting as an employer); 

(5) Or anyone acting in the capacity 

of officer or agent of such labor 

organization. 

(b) Additionally, employers 

exclusively employing workers who are 

excluded from the definition of 

‘‘employee’’ under the NLRA are not 

covered by the requirements of this part. 

Those excluded employees are 

employed: 

(1) As agricultural laborers; 

(2) In the domestic service of any 

family or person at his home; 

(3) By his parent or spouse; 

(4) As an independent contractor; 

(5) As a supervisor as defined under 

the NLRA; or 

(6) By an employer subject to the 

Railway Labor Act. 

Appendix A to Subpart A of Part 471— 

Text of Employee Notice Clause 

‘‘1. During the term of this contract, the 

contractor agrees to post a notice, of such size 

and in such form, and containing such 

content as the Secretary of Labor shall 

prescribe, in conspicuous places in and about 

its plants and offices where employees 

covered by the National Labor Relations Act 

engage in activities relating to the 

performance of the contract, including all 

places where notices to employees are 

customarily posted both physically and 

electronically. The ‘‘Secretary’s Notice’’ shall 

include the following information: 

‘‘NOTICE TO EMPLOYEES 

RIGHTS OF EMPLOYEES UNDER THE 

NATIONAL LABOR RELATIONS ACT 

‘‘It is the policy of the United States to 

encourage collective bargaining and protect 

the exercise by workers of full freedom of 

association, self-organization, and 

designation of representatives of their own 

choosing, for the purpose of negotiating the 

terms and conditions of their employment or 

other mutual aid and protection. 

‘‘Under federal law, you have the right to: 

Organize a union to negotiate with your 

employer concerning your wages, hours, and 

other terms and conditions of employment. 


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Form, join or assist a union. 

Bargain collectively through a duly 

selected union for a contract with your 

employer setting your wages, benefits, hours, 

and other working conditions. 

Discuss your terms and conditions of 

employment with your co-workers or a 

union; join other workers in raising workrelated complaints with your employer, 

government agencies, or members of the 

public; and seek and receive help from a 

union subject to certain limitations. 

Take action with one or more co-workers 

to improve your working conditions, 

including attending rallies on non-work time, 

and leafleting on non-work time in non-work 

areas. 

Strike and picket, unless your union has 

agreed to a no-strike clause and subject to 

certain other limitations. In some 

circumstances, your employer may 

permanently replace strikers. 

Choose not to do any of these activities, 

including joining or remaining a member of 

a union. 

‘‘It is illegal for your employer to: 

Prohibit you from soliciting for the union 

during non-work time or distributing union 

literature during non-work time, in non-work 

areas. 

Question you about your union support or 

activities. 

Fire, demote, or transfer you, or reduce 

your hours or change your shift, or otherwise 

take adverse action against you, or threaten 

to take any of these actions, because you join 

or support a union, or because you engage in 

other activity for mutual aid and protection, 

or because you choose not to engage in any 

such activity. 

Threaten to close your workplace if 

workers choose a union to represent them. 

Promise or grant promotions, pay raises, or 

other benefits to discourage or encourage 

union support. 

Prohibit you from wearing union hats, 

buttons, t-shirts, and pins in the workplace 

except under special circumstances, for 

example, as where doing so might interfere 

with patient care. 

Spy on or videotape peaceful union 

activities and gatherings or pretend to do so. 

It is illegal for a union or for the union that 

represents you in bargaining with your 

employer to: discriminate or take other 

adverse action against you based on whether 

you have joined or support the union. 

‘‘If your rights are violated: 

Illegal conduct will not be permitted. The 

National Labor Relations Board (NLRB), an 

agency of the United States government, will 

protect your right to a free choice concerning 

union representation and collective 

bargaining and will prosecute violators of the 

National Labor Relations Act. The NLRB may 

order an employer to rehire a worker fired in 

violation of the law and to pay lost wages 

and benefits and may order an employer or 

union to cease violating the law. The NLRB 

can only act, however, if it receives 

information of unlawful behavior within six 

months. 

‘‘If you believe your rights or the rights of 

others have been violated, you must contact 

the NLRB within six months of the unlawful 

treatment. Employees should seek assistance 

from the nearest regional NLRB office, which 

can be found on the Agency’s Web site: 

http://www.nlrb.gov. 

‘‘Click on the NLRB’s page titled About Us, 

which contains a link, Locating Our Offices. 

You can also contact the NLRB by calling 

toll-free: 1–866–667–NLRB (6572) or (TTY) 

1–866–315–NLRB (1–866–315–6572) for 

hearing impaired. 

‘‘This is an official Government Notice and 

must not be defaced by anyone. 

‘‘2. The contractor will comply with all 

provisions of the Secretary’s Notice, and 

related rules, regulations, and orders of the 

Secretary of Labor. 

‘‘3. In the event that the contractor does not 

comply with any of the requirements set 

forth in paragraphs (1) or (2) above, this 

contract may be cancelled, terminated, or 

suspended in whole or in part, and the 

contractor may be declared ineligible for 

further Government contracts in accordance 

with procedures authorized in or adopted 

pursuant to Executive Order 13496 of January 

30, 2009. Such other sanctions or remedies 

may be imposed as are provided in Executive 

Order 13496 of January 30, 2009, or by rule, 

regulation, or order of the Secretary of Labor, 

or as are otherwise provided by law. 

‘‘4. The contractor will include the 

provisions of paragraphs (1) through (4) 

herein in every subcontract or purchase order 

entered into in connection with this contract 

(unless exempted by rules, regulations, or 

orders of the Secretary of Labor issued 

pursuant to section 3 of Executive Order 

13496 of January 30, 2009, so that such 

provisions will be binding upon each 

subcontractor. The contractor will take such 

action with respect to any such subcontract 

or purchase order as may be directed by the 

Secretary of Labor as a means of enforcing 

such provisions, including the imposition of 

sanctions for non-compliance: Provided, 

however, if the contractor becomes involved 

in litigation with a subcontractor, or is 

threatened with such involvement, as a result 

of such direction, the contractor may request 

the United States to enter into such litigation 

to protect the interests of the United States.’’ 

Appendix B to Subpart A of Part 471— 

Electronic Link Language 

RIGHTS OF EMPLOYEES UNDER THE 

NATIONAL LABOR RELATIONS ACT 

‘‘It is the policy of the United States to 

encourage collective bargaining and protect 

the exercise by workers of full freedom of 

association, self-organization, and 

designation of representatives of their own 

choosing, for the purpose of negotiating the 

terms and conditions of their employment or 

other mutual aid and protection.’’ 

Subpart B—General Enforcement; 

Compliance Review and Complaint 

Procedures 

§ 471.10 How will the Department 

determine whether a contractor is in 

compliance with Executive Order 13496 and 

this part? 

(a) The Deputy Assistant Secretary for 

Federal Contract Compliance may 

conduct a compliance evaluation to 

determine whether a contractor holding 

a covered contract is in compliance with 

the requirements of this part. Such an 

evaluation may be limited to 

compliance with this part or may be 

included in a compliance evaluation 

conducted under other laws, Executive 

Orders, and/or regulations enforced by 

the Department. 

(b) During such an evaluation, a 

determination will be made whether: 

(1) The employee notice required by 

§ 471.2(a) is posted in conspicuous 

places in and about each of the 

contractor’s establishments and/or 

construction work sites, including all 

places where notices to employees are 

customarily posted both physically and 

electronically; and 

(2) The provisions of the employee 

notice clause are included in 

government contracts, subcontracts or 

purchase orders entered into on or after 

[THE EFFECTIVE DATE OF FINAL 

RULE], or that the government 

contracts, subcontracts or purchase 

orders have been exempted under 

§ 471.3(b). 

(c) The results of the evaluation will 

be documented in the evaluation record, 

which will include findings regarding 

the contractor’s compliance with the 

requirements of Executive Order 13496 

and this part and, as applicable, 

conciliation efforts made, corrective 

action taken and/or enforcement 

recommended under § 471.13. 

§ 471.11 What are the procedures for filing 

and processing a complaint? 

(a) Filing complaints. An employee of 

a covered contractor may file a 

complaint alleging that the contractor 

has failed to post the employee notice 

as required by Executive Order 13496 

and this part; and/or has failed to 

include the employee notice clause in 

subcontracts or purchase orders. 

Complaints may be filed with the Office 

of Labor-Management Standards 

(OLMS) or the Office of Federal Contract 

Compliance Programs (OFCCP) at 200 

Constitution Avenue, NW., Washington, 

DC 20210, or with any OLMS or OFCCP 

field office. 

(b) Contents of complaints. The 

complaint must be in writing and must 

include the name, address, and 

telephone number of the employee who 

filed the complaint (the complainant), 

the name and address of the contractor 

alleged to have violated Executive Order 

13496 and this part, an identification of 

the alleged violation and the 

establishment or construction work site 

where it is alleged to have occurred, and 

any other pertinent information that 

will assist in the investigation and 


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resolution of the complaint. The 

complainant must sign the complaint. 

(c) Complaint investigations. In 

investigating complaints filed with the 

Department under paragraph (a) of this 

section, the Deputy Assistant Secretary 

for Federal Contract Compliance will 

evaluate the allegations of the complaint 

and develop a case record. The record 

will include findings regarding the 

contractor’s compliance with the 

requirements of Executive Order 13496 

and this part, and, as applicable, a 

description of conciliation efforts made, 

corrective action taken, and/or 

enforcement recommended. 

§ 471.12 What are the procedures to be 

followed when a violation is found during a 

complaint investigation or compliance 

evaluation? 

(a) If any complaint investigation or 

compliance evaluation indicates a 

violation of Executive Order 13496 or 

this part, the Deputy Assistant Secretary 

for Federal Contract Compliance will 

make reasonable efforts to secure 

compliance through conciliation. 

(b) The contractor must correct the 

violation found by the Department (for 

example, by posting the required 

employee notice, and/or by amending 

its subcontracts or purchase orders with 

subcontractors to include the employee 

notice clause), and must commit, in 

writing, not to repeat the violation, 

before the contractor may be found to be 

in compliance with Executive Order 

13496 or this part. 

(c) If a violation cannot be resolved 

through conciliation efforts, the Deputy 

Assistant Secretary for Federal Contract 

Compliance will refer the matter to the 

Deputy Assistant Secretary for LaborManagement Programs, who may 

proceed in accordance with § 471.13. 

(d) For reasonable cause shown, the 

Deputy Assistant Secretary for LaborManagement Programs may reconsider, 

or cause to be reconsidered, any matter 

on his or her own motion or pursuant 

to a request. 

§ 471.13 Under what circumstances, and 

how, will enforcement proceedings under 

Executive Order 13496 be conducted? 

(a) General. (1) Violations of 

Executive Order 13496 and this part 

may result in administrative 

proceedings to enforce the Order and 

the part. The bases for a finding of a 

violation may include, but are not 

limited to: 

(i) The results of a compliance 

evaluation; 

(ii) The results of a complaint 

investigation; 

(iii) A contractor’s refusal to allow a 

compliance evaluation or complaint 

investigation to be conducted; or 

(iv) A contractor’s refusal to cooperate 

with the compliance evaluation or 

complaint investigation, including 

failure to provide information sought 

during those procedures. 

(v) A contractor’s refusal to take such 

action with respect to a subcontract as 

is directed by the Deputy Assistant 

Secretary for Federal Contract 

Compliance or the Deputy Assistant 

Secretary for Labor-Management as a 

means of enforcing compliance with the 

provision of this part. 

(vi) A subcontractor’s refusal to 

adhere to the requirements of this part 

regarding employee notice or inclusion 

of the contract clause in its 

subcontracts. 

(2) If a determination is made by the 

Deputy Assistant Secretary for Federal 

Contract Compliance that the Executive 

Order or the regulations in this part 

have been violated, and the violation 

has not been corrected through 

conciliation, he will refer the matter to 

the Deputy Assistant Secretary for 

Labor-Management Programs for 

enforcement consideration. The Deputy 

Assistant Secretary for LaborManagement Programs may refer the 

matter to the Solicitor of Labor for 

institution of administrative 

enforcement proceedings. 

(b) Administrative enforcement 

proceedings. (1) Administrative 

enforcement proceedings will be 

conducted under the control and 

supervision of the Solicitor of Labor, 

under the hearing procedures set forth 

in 29 CFR part 18, Rules of Practice and 

Procedure for Administrative Hearings 

Before the Office of Administrative Law 

Judges. 

(2) The administrative law judge will 

certify his or her recommended decision 

issued pursuant to 29 CFR 18.57 to the 

Assistant Secretary. The decision will 

be served on all parties and amici. 

(3) Within 25 days (10 days in the 

event that the proceeding is expedited) 

after receipt of the administrative law 

judge’s recommended decision, either 

party may file exceptions to the 

decision. Exceptions may be responded 

to by the other parties within 25 days 

(7 days if the proceeding is expedited) 

after receipt. All exceptions and 

responses must be filed with the 

Assistant Secretary. 

(4) After the expiration of time for 

filing exceptions, the Assistant 

Secretary may issue a final 

administrative order, or may make such 

other disposition of the matter as he or 

she finds appropriate. In an expedited 

proceeding, unless the Assistant 

Secretary issues a final administrative 

order within 30 days after the expiration 

of time for filing exceptions, the 

administrative law judge’s 

recommended decision will become the 

final administrative order. If the 

Assistant Secretary determines that the 

contractor has violated Executive Order 

13496 or the regulations in this part, the 

final administrative order will order the 

contractor to cease and desist from the 

violations, require the contractor to 

provide appropriate remedies, or, 

subject to the procedures in § 471.14, 

impose appropriate sanctions and 

penalties, or any combination thereof. 

§ 471.14 What sanctions and penalties 

may be imposed for noncompliance, and 

what procedures will the Department follow 

in imposing such sanctions and penalties? 

(a) After a final decision on the merits 

has been issued and before imposing the 

sanctions and penalties described in 

paragraph (d) of this section, the 

Assistant Secretary will consult with the 

affected contracting agencies, and 

provide the heads of those agencies the 

opportunity to respond and provide 

written objections. 

(b) If the contracting agency provides 

written objections, those objections 

must include a complete statement of 

reasons for the objections, among which 

reasons must be a finding that, as 

applicable, the completion of the 

contract, or further contracts or 

extensions or modifications of existing 

contracts, is essential to the agency’s 

mission. 

(c) The sanctions and penalties 

described in this section, however, will 

not be imposed if: 

(1) The head of the contracting 

agency, or his or her designee, continues 

to object to the imposition of such 

sanctions and penalties, or 

(2) The contractor has not been 

afforded an opportunity for a hearing. 

(d) In enforcing Executive Order 

13496 and this part, the Assistant 

Secretary may: 

(1) Direct a contracting agency to 

cancel, terminate, suspend, or cause to 

be canceled, terminated or suspended, 

any contract or any portions thereof, for 

failure of the contractor to comply with 

its contractual provisions as required by 

section 7(a) of Executive Order 13496 

and the regulations in this part. 

Contracts may be canceled, terminated, 

or suspended absolutely, or continuance 

of contracts may be conditioned upon 

compliance. 

(2) Issue an order of debarment under 

section 7(b) of Executive Order 13496 

providing that one or more contracting 

agencies must refrain from entering into 

further contracts, or extensions or other 

modification of existing contracts, with 

any non-complying contractor. 

(3) Issue an order of debarment under 

section 7(b) of Executive Order 13496 


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providing that no contracting agency 

may enter into a contract with any noncomplying subcontractor. 

(e) Whenever the Assistant Secretary 

has exercised his or her authority 

pursuant to paragraph (d) of this 

section, the contracting agency must 

report the actions it has taken to the 

Assistant Secretary within such time as 

the Assistant Secretary will specify. 

(f) Periodically, the Assistant 

Secretary will publish and distribute, or 

cause to be published and distributed, 

to all executive agencies a list of the 

names of contractors and subcontractors 

that have, in the judgment of the 

Assistant Secretary under § 471.13(b)(4) 

of this part, failed to comply with the 

provisions of the Executive Order and 

this part, or of related rules, regulations, 

and orders of the Secretary of Labor, and 

as a result have been declared ineligible 

for future contracts or subcontracts 

under the Executive Order and the 

regulations in this part. 

§ 471.15 Under what circumstances must a 

contractor be provided the opportunity for 

a hearing? 

Before the Assistant Secretary takes 

the following action, a contractor or 

subcontractor must be given the 

opportunity for a hearing before the 

Assistant Secretary: 

(a) Issues an order for cancellation, 

termination, or suspension of any 

contract or debarment of any contractor 

from further Government contracts 

under sections 7(a) or (b) of Executive 

Order 13496 and § 471.14(d)(1) or (2) of 

this part; or 

(b) Includes the contractor on a 

published list of non-complying 

contractors under section 7(c) of 

Executive Order 13496 and § 471.14(f) 

of this part. 

§ 471.16 Under what circumstances may a 

contractor be reinstated? 

Any contractor or subcontractor 

debarred from or declared ineligible for 

further contracts or subcontracts under 

Executive Order 13496 and this part 

may request reinstatement in a letter to 

the Assistant Secretary. If the Assistant 

Secretary finds that the contractor or 

subcontractor has come into compliance 

with Executive Order 13496 and this 

part and has shown that it will carry out 

Executive Order 13496 and this part, the 

contractor or subcontractor may be 

reinstated. 

Subpart C—Ancillary Matters 

§ 471.20 What authority under this part or 

Executive Order 13496 may the Secretary 

delegate, and under what circumstances? 

Section 11 of Executive Order 13496 

grants the Secretary the right to delegate 

any of his/her functions or duties under 

the Order to any officer in the 

Department of Labor or to any other 

officer in the executive branch of the 

Government, with the consent of the 

head of the department or agency in 

which that officer serves. 

§ 471.21 Who will make rulings and 

interpretations under Executive Order 

13496 and this part? 

Rulings under or interpretations of 

Executive Order 13496 or the 

regulations contained in this part will 

be made by the Assistant Secretary or 

his or her designee. 

§ 471.22 What actions may the Assistant 

Secretary take in the case of intimidation 

and interference? 

The sanctions and penalties contained 

in § 471.14 of this part may be exercised 

by the Assistant Secretary against any 

contractor or subcontractor who fails to 

take all necessary steps to ensure that no 

person intimidates, threatens, or coerces 

any individual for the purpose of 

interfering with the filing of a 

complaint, furnishing information, or 

assisting or participating in any manner 

in a compliance evaluation, complaint 

investigation, hearing, or any other 

activity related to the administration or 

enforcement of Executive Order 13496 

or this part. 

§ 471.23 What other provisions apply to 

this part? 

(a) The regulations in this part 

implement Executive Order 13496 only, 

and do not modify or affect the 

interpretation of any other Department 

of Labor regulations or policy. 

(b) Consistent with section 9 of 

Executive Order 13496, each contracting 

department and agency must cooperate 

with the Assistant Secretary, the Deputy 

Assistant Secretary for LaborManagement Programs, and/or the 

Deputy Assistant Secretary for Federal 

Contract Compliance, and must provide 

such information and assistance as the 

Assistant Secretary or Deputy Assistant 

Secretary may require, in the 

performance of his or her functions 

under the Executive Order and the 

regulations in this part. 

(c)(1) Consistent with section 15 of 

Executive Order 13496, nothing in this 

subpart shall be construed to impair or 

otherwise affect: 

(i) Authority granted by law to a 

department, agency, or the head thereof; 

or 

(ii) Functions of the Director of the 

Office of Management and Budget 

relating to budgetary, administrative, or 

legislative proposals. 

(2) This subpart shall be implemented 

consistent with applicable law and 

subject to the availability of 

appropriations. 

(d) Consistent with section 15 of 

Executive Order 13496, nothing 

contained in the Executive Order or this 

part, or promulgated pursuant to 

Executive Order 13496 or this part, is 

intended to create any right or benefit, 

substantive or procedural, enforceable at 

law or in equity by any party against the 

United States, its departments, agencies, 

or entities, its officers, employees, or 

agents, or any other person. Neither 

Executive Order 13496 nor this part 

creates any such right or benefit. 

Signed in Washington, DC, July 20, 2009. 

Shelby Hallmark, 

Acting Assistant Secretary for Employment 

Standards. 

John Lund, 

Deputy Assistant Secretary, Office of LaborManagement Standards. 

Lorenzo D. Harrison, 

Director, Division of Policy, Planning and 

Program Development, Office of Federal 

Contract Compliance Programs. 

[FR Doc. E9–17577 Filed 7–31–09; 8:45 am] 

BILLING CODE P 


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