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New Protections for Service Contract Act Workers

January 02, 2013
Client Alert

Effective Jan. 18, 2013, successor contractors under the Service Contract Act (SCA) will be subject to a new non-displacement rule relating to the personnel of predecessor contractors. Under the rule, workers on a federal service contract who would otherwise lose their jobs as a result of the completion or expiration of a contract must be given the right of first refusal for employment with the successor contractor. The rule contains obligations applicable to both the predecessor and successor contractor, and does allow in certain circumstances for the successor contractor to reduce the size of the workforce, give first preference to certain of its current employees, and offer different types of positions to the personnel of the predecessor contractor.

The rule applies 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. There are certain exceptions to the new rule that should be reviewed with legal counsel as appropriate.

For the text of the new rule, along with compliance assistance and contact information for the dedicated compliance hotline, click here.

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