New Regulations Make it More Difficult to Displace Workers Under Service Contracts

The “Nondisplacement of Qualified Workers Under Service Contracts” (subpart 22.12) goes into effect January 18, 2013.  This new regulation will protect Union members covered by the Service Contract Act. 

For workers on service contracts with the federal government, this means that new employers have to offer jobs to the workers for the old employer.

The final rule applies to service contracts, for performance by service employees (1) of the same or similar work, (2) at the same location.  Employees get a right of first refusal for positions for which they are qualified. 

The predecessor contractor must also notify workers of their possible right to an offer of employment.  This notice may either be posted in a conspicuous place at the worksite or  delivered to the employees individually.  An offer of employment may be for any position for which the employee is qualified; the offer need not be for the same position that the employee previously held.

This final rule implements an Executive Order signed by President Obama in January 2009 and Department of Labor implementing regulations issued under Secretary of Labor, Hilda Solis. 

For more information on the application of this new rule, contact your labor law counsel. 

By Lisl Duncan

Legal Developments