McDonald Hopkins Law Firm Alert: Government Contractors Strongly Encouraged to Take the 'High Road' in Employee Relations

Obama Administration pushes sweeping changes to contractors' workplaces

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Mar 04, 2010, 04:31 ET

CLEVELAND, March 4 /PRNewswire/ -- This past week, the Obama Administration began a slow roll out of a new initiative to overhaul the terms and conditions of work for employees of businesses with federal contracts. Under the so-called High Road Procurement Policy, federal procurement officers would give preference to bids by companies with higher levels of pay, health care coverage, pensions, and other benefits as well as companies with histories of harmonious labor relations. Such evaluation criteria would likely favor unionized firms. It is anticipated that this new policy would be instituted by Executive Order, rather than through legislation passed by Congress.

The High Road Procurement Policy is only the latest in a series of White House initiatives intended to change the way businesses manage their workforces:

Stepping up enforcement of worker classification laws

Dating back to his days in the Illinois State Legislature, President Obama has long been a proponent of overhauling laws and regulations governing businesses' use of independent contractors, arguing that businesses frequently misclassify their workers as independent contractors rather than employees in order to avoid certain payroll, benefits, workers' compensation and unemployment tax obligations. This past month, the IRS began a pilot project to step up its audit program on worker classification. The IRS plans to use the data collected from the pilot project to update its non-compliance estimates and retool its computer-driven audit selection programs. All businesses (whether they do business with the government or not) can expect expanded audit efforts in the future as well as new legislation governing worker classification along the lines of then-United States Senator Obama's proposed Independent Contractor Proper Classification Act of 2007.

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McDonald Hopkins Alert – Government Contractors Strongly Encouraged to Take the "High Road" in Employee Relations.

http://www.mcdonaldhopkins.com/alerts/alert.aspx?id=Oee8FFxk4EuD0cGd59yEhQ

About McDonald Hopkins

With more than 130 attorneys in Chicago, Cleveland, Columbus, Detroit, and West Palm Beach, McDonald Hopkins is a business advisory and advocacy law firm focused on business law, litigation, business restructuring, labor and employment, government affairs, healthcare, and estate planning. The president of McDonald Hopkins is Carl J. Grassi. For more information about McDonald Hopkins, visit http://www.mcdonaldhopkins.com.