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DOL Announces Final Rule on Nondisplacement of Service Contract Workers

December 19, 2023

The Department of Labor (DOL) has announced a final rule to enact the provisions of Executive Order (EO) 14055, titled “Nondisplacement of Qualified Workers Under Service Contracts.” This EO, issued by President Biden, mandates that contractors and subcontractors engaged in federal service contracts must extend the right of first refusal for employment on the successor contract to service employees previously employed under the predecessor contract.

The final rule establishes comprehensive standards and procedures for implementing and enforcing EO 14055. The rule outlines the obligations of contracting agencies and contractors under the executive order, creating a robust investigation process designed to safeguard workers from displacement. Additionally, it clarifies how the executive order applies to subcontracts and enumerates potential sanctions and remedies that the Department of Labor may impose.

The final rule takes effect on February 12, 2024. However, it will apply exclusively to solicitations issued on or after this effective date as stipulated by regulations from the Federal Acquisition Regulatory Council (FAR Council). For more information, please visit Final Rule: Nondisplacement of Qualified Workers under Service Contracts.