• New Posting and Other Requirements for Financial Institutions
  • September 16, 2010 | Author: Mary M. Krakow
  • Law Firm: Fredrikson & Byron, P.A. - Minneapolis Office
  • Financial institutions that meet the definition of a “federal government contractor” must now comply with new posting and other requirements, in addition to their long-standing affirmative action requirements.

    Financial institutions are considered “federal government contractors” if they: (1) serve as a depository of government funds in any amount; (2) serve as an issuing and paying agent for U.S. savings bonds and savings notes in any amount; and/or (3) obtain depository insurance from the Federal Deposit Insurance Corporation.

    Executive Order 13496 Posting Requirements

    Beginning on June 21, 2010, financial institutions and all other federal government contractors must comply with the requirements of President Barack Obama’s Executive Order 13496 (E.O. 13496).

    A primary requirement of E.O. 13496 is to prominently post the new “Employee Rights Under the National Labor Relations Act” poster in conspicuous places in the workplace so that employees can readily see it. The National Labor Relations Act (NLRA) is the primary federal law governing relations between employees and unions in the workplace. The poster, which must be posted in its exact size (11” x 17”) and color as published by the government, can be downloaded from the following site: www.olms.dol.gov. The poster tells employees about their NLRA rights to organize and collectively bargain with their employers and to engage in other protected concerted activity.

    Financial institutions can satisfy the posting requirement by displaying the poster with other required employment-related posters at all main and branch sites and, per the governing regulations, within the workplace where employees are performing duties that fulfill the government contract. In addition, any contractor that typically provides employment-related information to employees electronically (for example, publishing an employee handbook online) also must post the NLRA notice electronically. The easiest way to satisfy this requirement is to include a link on the company’s intranet or Internet site to the Department of Labor’s web site (www.olms.dol.gov) that contains the full text of the required poster. When doing so, the link must read exactly as follows: “Important Notice about Employee Rights to Organize and Bargain Collectively with Their Employers.” For both the physical poster and the electronic posting, if a significant portion of the contractor’s employees are not proficient in English, both also must be provided in the language the employees speak.

    A second requirement of E.O. 13496 is that contractors include the poster’s content in every subcontract or purchase order of $10,000 or greater entered into on or after June 21, 2010, for the purchase of any supplies or nonpersonal services (such as utilities, construction, transportation, research, and insurance) for the contractor’s performance of the federal contract. This requirement can be satisfied by stating in the subcontract or purchase order “29 C.F.R. Part 471, Appendix A to Subpart A is incorporated by reference.”

    Yet another result of E.O. 13496 was to reverse the Bush Administration’s executive order requiring federal contractors to post what was commonly referred to as a “Beck Notice.” The Beck Notice informed employees of their right not to join unions.

    Enforcement of the requirements of E.O. 13496 is under the joint authority of the Office of Federal Contract Compliance Programs (OFCCP) and the Office of Labor-Management Standards (OLMS). The OFCCP may on its own initiative conduct a compliance evaluation of any federal contractor or will do so upon receipt of an employee complaint. If the OFCCP determines that the contractor has not fully complied with the above requirements, it will first seek voluntary compliance. If the contractor will not comply, the OFCCP will refer the matter to the Director of OLMS for an administrative enforcement proceeding—litigation. Canceling or terminating the government contract and/or barring the contractor from future federal contracts are available sanctions for noncompliance.

    Executive Order 11246 Affirmative Action Requirements

    In addition to the new posting and other requirements of E.O. 13496, financial institutions with a total of 50 or more employees (counting all regular, temporary, full-time, and part-time employees at all sites) have long been required by E.O. 11246 to comply with the federal affirmative action requirements if they: (1) issue and redeem U.S. savings bonds or notes in any amount; (2) serve as a depository of federal government funds in any amount; or (3) otherwise have a federal contract or subcontract that pays the institution $50,000 or more annually. Any financial institution meeting these two threshold requirements (having a total of 50 or more employees and providing one or more of the designated services) must prepare and implement a written affirmative action program (AAP) meeting all of the federal requirements.

    In very brief summary, the AAP must include required statistical analyses for women and minorities and also must cover qualified individuals with disabilities and designated veterans. The written program is not sent to any federal office but must be available for two years in the event the OFCCP conducts a compliance review. The financial institution also must maintain personnel and employment records generally for not less than two years from the date the record is made or the personnel action taken, and track applicants, hires, promotions, and terminations by gender, race and ethnicity, making the records available to the OFCCP upon request. Also, if the financial institution solicits or accepts job applications or résumés from job candidates via the Internet or other electronic methods, it must fulfill additional record retention requirements. In addition to significant monetary fines following an OFCCP review that finds noncompliance, canceling or terminating the government contract and/or barring the contractor from future federal contracts are available sanctions for noncompliance with the AAP requirements.


    Financial institutions should review their posting and affirmative action requirements to avoid significant penalties for noncompliance.