Workers who would otherwise lose their jobs at the end of their employer’s federal contract would be first in line for jobs next, under a presidential executive order Joe Biden signed Thursday.

the order directs federal agencies to include a clause in reissued service contracts to give employees of a predecessor the right of first refusal to keep their jobs. The U.S. Department of Labor will finalize policy details by spring 2022.

Companies that defy the order could be forced to pay lost wages to the former contractor’s workers or offer them jobs, depending on the order. For example, a contractor might challenge the order by bidding on a re-competitive contract at a lower cost than the incumbent contractor and planning to hire lower-paid workers to meet that bid.

Workers must be qualified to be eligible for the new jobs, and the job on the new contract must be similar to the jobs on the predecessor’s contract.

The order provides increased stability for workers and their unions in providing services for federal agencies when contracts change hands, while adding compliance requirements for companies that win the bids.

The Department of Labor is also expected to release a final rule shortly raising the minimum wage on federal contracts to $15 an hour.

The president’s directive comes as federal spending on contracts increases and federal agencies prepare to implement the new infrastructure law.

Due to Covid-19 response needs, federal spending on contracts hit a record $686 billion in fiscal year 2020, up 14% from a year earlier, the report says. federal on government contracts Bloomberg. Data.

Defense contractors Lockheed Martin Corp., Raytheon Technologies Corp., and General Dynamics Corp. received a total of $129.5 billion from these expenditures.

—With help from Ben Penn

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