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Sunday, May 17, 2026

DOL Requires Federal Contractors to Hire Predecessor's Workers - SHRM

On Dec. 13, the U.S. Department of Labor released a final rule aimed at retaining workers when federal contracts shift. The workers on a federal contract will have the right of first refusal to the job if the contract changes hands. They will have 10 business days to accept or reject the employment offer. Successor contractors will not have to give the right of first refusal to workers whose past performance indicates there would be just cause for discharge.

The predecessor contractor will have to give the successor contractor updated lists of their employees at least 10 business days before completing the contract. The successor contractor will have to recognize and bargain with any existing unions. The rule will take effect around Feb. 12, which is 60 days after being published in the Federal Register.

The rule implements an executive order that President Joe Biden issued on Nov. 18, 2021.

The executive order stated its goal is to "reduce disruption in the delivery of services during the period of transition between contractors, maintain physical and information security, and provide the federal government with the benefits of an experienced and well-trained workforce that is familiar with the federal government's personnel, facilities and performance."

Opponents Criticize the Proposal

Some business groups voiced their opposition to the rule.

In public comments to the DOL, the Professional Services Council, an Arlington, Va.-based trade group representing federal...



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