Recently some contractors told us they were surprised when OFCCP wanted to audit their compliance with Executive Order 13201, which is commonly referred to as the “Beck notice.” So we thought this would be a good time for a quick refresher on the Beck requirements and what you might expect from OFCCP.
Background: President George W. Bush issued Executive Order 13201 on February 17, 2001. It requires government contracts and subcontracts to include an employee notice clause requiring Federal contractors and subcontractors that are not exempt to post notices informing their employees that they have certain rights related to union membership and use of union dues and fees under Federal law.
The term "Beck" comes from the U.S. Supreme Court’s 1988 decision in Communication Workers v. Beck that held union-represented workers who pay agency fees in lieu of union dues cannot be required to pay the portion of dues that cover union expenditures not related to collective bargaining, contract administration, or the adjustment of grievances.
Final Regulation: On March 29, 2004, the Department of Labor’s Office of Labor-Management Standards issued a final rule outlining federal contractors’ requirements in more specific detail.
The rule requires federal contractors to post in their worksites a poster printed and distributed by the Labor Department or a contracting agency detailing employees’ rights under Beck. The notice must be posted “in conspicuous places in and about its plants and offices, including all places where notices to employees are customarily posted.”
Exemptions: There are some exemptions to the contract provision and employee notice requirements. For example, the clause does not have to be included in government contracts for purchases below the “Simplified Acquisition Threshold” (currently $100,000 according to OFCCP’s Web site). There are also exemptions based on when the contract was entered into and when solicitations for the contract were made.
Also, certain contractors or work sites are exempt from the Executive Order. For example, the posting requirement does not apply to any of the following:
- Contractors with fewer than 15 employees
- Contractor establishments or construction work sites where no union has been formally recognized by the prime contractor or certified as the exclusive bargaining representative of the prime contractor’s employees
- Contractor establishments where state law forbids enforcement of union-security clauses (“right-to-work” states)
- Work performed outside the U.S. that does not involve the recruitment or employment of workers within the U.S.
Enforcement: OFCCP is the agency charged with enforcing these requirements. It is directed to resolve violations first through conciliation by asking the contractor to correct the violation and commit in writing not to repeat it.
Administrative enforcement proceedings may ensue if conciliation fails. Sanctions available under the executive order include suspension or termination of existing contracts and debarment from future contracts.
OFCCP Inspections: Last summer, OFCCP began inspecting federal contractors’ compliance with the Beck requirements, and contractors should anticipate OFCCP will continue with these on-site inspections.
Also, keep in mind that if OFCCP contacts you to schedule an onsite visit whose timing is just a little unusual to you, their request might be to verify your compliance with the Beck requirements. In such a case, DCI recommends that you ask OFCCP to state in writing that the purpose of their visit is related to Beck compliance.
Remember that an onsite visit could also result in their request to audit your company’s I-9 forms.
Excellent information on these requirements is available through DOL’s compliance assistance Web site. It also includes a fairly complete FAQ section with more detailed information on what steps your company should take to get into compliance.