Wage and Hour Division (WHD)
Final Rule on Nondisplacement of Qualified Workers Under Service Contracts
Executive Order (EO) 13495, “Nondisplacement of Qualified Workers Under Service Contracts,” signed by President Obama on January 30, 2009, became effective on January 18, 2013. The Department’s Regulations at 29 CFR Part 9 and the related FAR clauses have been issued and are also now effective. The terms of the regulations will apply to all new solicitations issued after January 18, 2013.
The regulations require that workers on a federal service contract who would otherwise lose their jobs as a result of the completion or expiration of a contract be given the right of first refusal for employment with the successor contractor. The regulations apply to all service contracts (prime and subcontractor) above the simplified acquisition threshold (currently $150,000) and their solicitations, except those excluded, that succeed contracts for the same or similar services at the same location. The regulations exclude certain types of contracts and employees from its requirements as well as allow the head of a contracting department or agency to exempt any of its contracts from the regulations if it finds the requirements would not serve the purposes of the EO or would impair the Federal Government’s ability to procure services economically or efficiently.
Under the regulations, a successor contractor may reduce the size of the workforce, may give first preference to certain of its current employees, and may offer employment to the predecessor’s employees in positions for which they are qualified other than those which they held previously.
We have created a dedicated phone line and email address for the nondisplacement Executive Order. The public and interested parties may contact us at 202-693-1399 or via email at firstname.lastname@example.org.
New! The Wage and Hour Division will host two webinar sessions on Executive Order 13495 “Nondisplacement of Qualified Workers Under Service Contracts” on September 12, 2013. Click here for more details and information on registering.
Additional Resources on Final Rule:
- Final Rule (December 21, 2012)
- Final Rule (August 29, 2011)
- Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts
- PowerPoint Presentation: Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts "Right of First Refusal"
- Displaced Employee Rights on Successor Contracts Poster
- Fact Sheet 67A Nondisplacement of Qualified Workers Under Service Contracts
Additional Information about the Service Contract Act:
- Service Contract Act Factsheet
- Service Contract Act Webpage
- McNamara-O’Hara Service Contract Act of 1965, as Amended — 41 U.S.C. 351 et seq. (PDF)
- 29 C.F.R. Part 4 — Labor Standards for Federal Service Contracts
- 29 C.F.R. Part 6 — Rules of Practice for Administrative Proceedings Enforcing Labor Standards In Federal and Federally Assisted Construction Contracts and Federal Service Contracts
- 29 C.F.R. Part 8 — Practice Before the Administrative Review Board With Regard to Federal Service Contracts