Chairman Williams, Vice Chairman Luetkemeyer, Reps. Meuser and Bean Write to DOL Over New Rule Negatively Impacting Main Street

Summary

Press release dated February 1, 2024 saying Chairman Roger Williams (R-TX), Vice Chairman Blaine Luetkemeyer (R-MO) and Reps. Dan Meuser (R-PA) and Aaron Bean (R-FL) wrote to the Department of Labor about its rule titled Nondisplacement of Qualified Workers Under Service Contracts. The rule requires federal service contractors to offer jobs first to qualified workers from the predecessor contract. The letter says the rule imposes compliance costs on small entities and that up to 74 percent of affected entities are small contractors and subcontractors. It also disputes the DOL estimate that the notice and offer requirements take 45 minutes and says the DOL could have lessened the burden under Executive Order 14055.

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Full text

Chairman Williams, Vice Chairman Luetkemeyer, Reps. Meuser and Bean Write to DOL Over New Rule Negatively Impacting Main Street

February 1, 2024

WASHINGTON, D.C. – Today, Congressman Roger Williams (R-TX), Chairman of the House Committee on Small Business, along with Reps. Blaine Luetkemeyer (R-MO), Vice Chairman of the House Committee on Small Business, Dan Meuser (R-PA), and Aaron Bean (R-FL), wrote to the Department of Labor (DOL) regarding a new contracting rule that would make life more difficult for Main Street.

This letter builds on the House Committee on Small Business’ work to ensure federal agencies adhere to the Regulatory Flexibility Act and Small Business Regulatory Enforcement Fairness Act to protect small businesses from burdensome regulations and rulemaking.

Read the full letter here.

Read excerpts from the letter below:

“The House Committee on Small Business (the Committee) writes to inquire about the Department of Labor’s (DOL) recent rule change titled ‘Nondisplacement of Qualified Workers Under Service Contracts’ which forces contractors and subcontractors engaged in federal service contracts to first offer employment to qualified workers previously employed under the predecessor contract. The final rule imposes far-reaching compliance costs for small entities and could result in inefficiencies in the procurement process since the contractor cannot bring its own uniquely qualified employees to the project. Furthermore, the rule disproportionally impacts small entities—up to 74 percent of impacted entities are small contractors and subcontractors— and might discourage these small businesses from federal contracts. It appears that the DOL may not have properly considered small entities during this rulemaking process.

“According to the final rule, the contractor must offer a job not only to former service employees who appear on the certified list of all service employees on the predecessor contract, but also to employees who offer other ‘reliable’ evidence that they are eligible to a job offer. The rule creates multiple time consuming and costly requirements, such as notices to affected workers and their representatives, possible location-continuity notices, and successor contractor’s mandatory offer letters. However, the DOL estimates that these requirements would take only 45 minutes. Furthermore, according to the DOL, it will take about 30 minutes for a human resources staff member to review this rule and about 30 minutes for contractors to incorporate the contract clause into their covered subcontracts. Further, though the DOL is issuing this rulemaking to implement the Executive Order 14055 and thus has limited instances to use its own discretion, there are places where the DOL would have had the opportunity to lessen the impact on small businesses, but it chose not to do so.”

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