Quick Hits

• A new proposed rule from the U.S. Department of Labor (DOL), U.S. Department of Health and Human Services (HHS), and U.S. Department of the Treasury would allow employers to provide coverage for fertility treatments as a limited excepted benefit.
• Employees would be able to enroll in excepted benefit fertility coverage without having to enroll in the employer’s group health plan.
• This excepted benefit coverage would apply only to the diagnosis and treatment of medical infertility or related conditions.
• Comments on the proposed rule are due July 13, 2026.

Businesses would be permitted to offer fertility coverage as a limited excepted benefit, similar to the standalone dental and vision coverage that some employers offer, according to the proposed rule, which was issued by the U.S. Department of Labor, the U.S. Department of Health and Human Services, and the U.S. Department of the Treasury. Limited excepted benefits are not subject to requirements such as the Affordable Care Act (ACA) rules on annual and lifetime dollar limits and preventive services, the portability rules under the Health Insurance Portability and Accountability Act (HIPAA), and the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

To qualify as an excepted benefit, the fertility coverage would have to be either provided under a separate policy, certificate, or contract of insurance, or not be “an integral part of a plan,” such as a self-insured plan. For this purpose, “not an integral part” means that employees could enroll separately in fertility benefits or the employer’s group health plan or both.

The proposed rule defines fertility benefits as coverage provided for the “diagnosis, mitigation, or treatment of infertility or infertility-related reproductive health conditions.” This description may include in vitro fertilization (IVF), intrauterine insemination, direct sperm injection, fertility medications, fertility counseling, or surgery to remove fibroids or unblock fallopian tubes. Because the proposed rule is limited to benefits in connection with infertility, excepted benefit programs would potentially exclude fertility treatment for same-sex couples or benefits that are not for the purpose of treating infertility, such as egg freezing that is not medically necessary. That may make benefits on a limited excepted benefit basis less generous than what some employers already provide through their group health plans.

Fertility benefits offered as a limited excepted benefit would be subject to a lifetime maximum of up to $120,000 per participant (including beneficiaries) with mandatory inflation adjustment each year. Notice requirements also apply, which would require the employer to provide a coverage description with a summary of benefits and coverage limitations, how to identify and utilize a network provider, and procedures for claims reimbursement.

The proposed rule follows a 2025 executive order that directed federal agencies to produce policy recommendations to increase access to IVF and reduce the out-of-pocket costs to patients.

State Laws

A growing number of states and the District of Columbia have passed laws requiring fully insured health plans to cover infertility diagnosis and treatments. California, Colorado, Connecticut, Delaware, Illinois, Maryland, Massachusetts, Maine, New Hampshire, New Jersey, New York, Rhode Island, and Utah have laws that require certain health plans to cover in vitro fertilization or other fertility treatments, according to the Kaiser Family Foundation. Twenty-one states have laws that require health plans to cover fertility preservation, such as egg freezing or sperm freezing, when necessary because of a medical intervention like surgery, chemotherapy, or radiation. In some cases, religious employers may be exempt from state mandates to cover fertility treatments.

Next Steps

The deadline for the public to submit comments on the proposed rule is July 13, 2026.

Employers may wish to review their health plan designs and track the total number of employees receiving fertility treatments each year to assess what will best meet employees’ needs. If the proposed rule is finalized, then employers can consider whether providing a limited excepted benefit for fertility treatments would serve business objectives, such as boosting recruiting and retention.

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group will continue to monitor developments and will post updates on the Employee Benefits and Executive Compensation and Healthcare blogs as additional information becomes available. This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

This article and more information on how the administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

In addition, the Ogletree Deakins Client Portal provides subscribers with timely updates on state family and medical leave laws and pregnancy accommodation laws. Premium-level subscribers have access to comprehensive law summaries and updated policies, as well as detailed step-by-step guidance and templates for handling Pregnancy Accommodation Requests. Snapshots and Updates are complimentary for all registered client users. For more information on the Client Portal or a Client Portal subscription, please email clientportal@ogletree.com.

Timothy J. Stanton is a shareholder in Ogletree Deakins’ Chicago office.

Ryan B. Kadevari is an associate in Ogletree Deakins’ Los Angeles office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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Quick Hits

• Under German labor law, employees claiming unequal treatment in relation to a “comparator” must specifically demonstrate in court that they perform the same or equivalent work as the comparator.
• Anyone seeking to sue for “equal hourly wages” must specifically demonstrate the number of working hours on which their own monthly salary is based; without a verifiable gross hourly wage for the plaintiff, a comparison with the comparator’s gross hourly wage is not possible.

The Case—Information First, Payment Later

A female veterinarian demanded information and then back pay for alleged pay differences compared to male colleagues who received higher wages than she did. The BAG ultimately dismissed the lawsuit—in particular because key information regarding the comparability of the jobs was missing.

For several years, the employee had received a monthly base salary of EUR 3,900 gross as a salaried veterinarian at her father’s veterinary clinic. Her male veterinarian colleague—her brother—whom she used as a comparator received a significantly higher amount, EUR 7,100. To quantify her claims for payment, she filed a two-stage action (Stufenklage): In the first stage, the employer was to provide her with information regarding the gross hourly wage paid to all male veterinarians. In the second stage, she was to be paid the difference between that amount and the gross hourly wage she had received.

The Decision—No Pay Comparison Without Reliable Data

The veterinarian was unsuccessful with her claim both at the Hameln Labor Court and on appeal at the Lower Saxony Regional Labor Court. The 8th Senate of the BAG dismissed the veterinarian’s appeal, thereby upholding the lower courts’ dismissals of her claims. The BAG opinion clarifies: Under relevant European Union law, a party must demonstrate and prove that her employer pays her a lower wage than a male colleague. This can only be achieved if it is specifically demonstrated that she and the colleague perform the same or at least equivalent work. If the employee succeeds in doing so, there is prima facie evidence of discrimination, with the result that the employer would then have to prove that the pay difference is not based on gender discrimination.

In this specific case, the BAG held that the veterinarian was required to specify her gross hourly wage based on the actual hours worked. A general assertion that she worked “full-time” was insufficient here, particularly since the employer had argued that she worked only twenty hours per week. The veterinarian also failed to provide sufficient evidence regarding the equality or equivalence of the respective duties performed. She was required to indicate the extent to which she and her brother both performed the same tasks, e.g., “management duties.”

Clarification of the Burden of Presentation

The decision clarifies that an employee alleging unequal pay must provide specifics at the pleading stage. The BAG opinion also emphasizes, however, that the principles of the burden of proof are not “overstretched”—they are procedural minimum requirements that are also justified in light of EU law and the German Pay Transparency Act.

Outlook—New EU Requirements on Pay Transparency

The decision does not preclude upcoming changes under the EU Pay Transparency Directive (EU) 2023/970. The directive, which must be implemented by June 7, 2026, will introduce, among other things, a reversal of the burden of proof for employers, expanded rights to information regardless of company size, and reporting obligations for companies with one hundred or more employees, making opaque pay structures a significant liability risk in the future.

For further background on pay transparency, please see our article “Pay Transparency: Update for Employers in Germany.” Additional information and updates on the progress of the EU Pay Transparency Directive (EU) 2023/970 can be found using Ogletree Deakins’ Member State Implementation Tracker.

Ogletree Deakins’ Berlin and Munich offices will continue to monitor developments and will post updates on the Cross-Border, Germany, and Pay Equity blogs as additional information becomes available.

Lena Beyer, LL.M. (Tokyo), is an associate in the Berlin office of Ogletree Deakins.

Lela Salman, a law clerk in the Berlin office of Ogletree Deakins, contributed to this article.

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Quick Hits

• On May 12, 2026, the DOL announced temporary enforcement relief for retirement plan administrators that make good faith efforts to follow the new paper pension benefit statement rules.
• The policy allows plan administrators to rely on reasonable interpretations of the proposed rules until the DOL issues final guidance.
• Plan sponsors using electronic delivery may want to consider giving newly eligible participants an initial paper notice about their right to request paper documents.

Background

Section 105(a)(2) of ERISA through Section 338(a) of the SECURE 2.0 Act of 2022 (SECURE 2.0) requires that defined contribution plans furnish at least one pension benefit statement on paper in any calendar year and that defined benefit plans generally must furnish at least one paper pension benefit statement every three calendar years. Subparagraph (E) requires that statements be provided on paper at least once per year by defined contribution plans and once every three years by defined benefit plans. The paper benefit statement requirement added by SECURE 2.0 is effective for plan years beginning after December 31, 2025.

Prior to SECURE 2.0, the EBSA had provided two safe harbors for compliance with the pension benefit statement requirements. The 2002 Electronic Disclosure Safe Harbor permits the statements to be provided electronically to participants whose integral work duties put them in a position to effectively access electronic disclosures and to participants who affirmatively consent to electronic disclosures. The 2020 Alternative Safe Harbor permits electronic delivery of the statements to participants who have provided a valid electronic address to the plan sponsor, including those assigned an electronic address by the employer.

On February 25, 2026, the DOL issued a notice of proposed rulemaking (“Requirement to Provide Paper Statements in Certain Cases—Amendments to Electronic Disclosure Safe Harbors”) addressing the new requirements, as required by SECURE 2.0. The two safe harbors will continue to apply, thereby allowing employers to continue to use electronic delivery and avoid the paper statement requirement, with respect to participants who first became eligible to participate and beneficiaries who first became eligible for benefits on or before December 31, 2025. However, those who became eligible on or after January 1, 2026, must receive a one-time initial notice on paper informing them of their right to request that all documents be furnished on paper prior to delivering the required pension benefit statement through electronic delivery.

Temporary Enforcement Policy

Under the FAB, the DOL wishes to provide clarity and assurance to plan administrators in the absence of final regulations. To address concerns regarding the lack of clear guidance, the DOL has established a temporary enforcement policy. Until after the DOL issues final regulations or other applicable administrative guidance, the DOL, as an enforcement policy, will not take enforcement action against plan administrators that comply in good faith with a reasonable interpretation of the provisions set forth in the notice of proposed rulemaking released February 26, 2026. Additionally, the DOL will not take enforcement action against plan administrators that comply in good faith with a reasonable interpretation of Section 105(a)(2)(E) of ERISA pending the adoption of a final rule (for example, plan administrators may furnish the pension benefit statement described in Section 105(a)(2)(E) of ERISA in accordance with the current regulation under 29 CFR § 2520.104b-1(c)).

Plan sponsors that generally deliver pension benefit statements via electronic delivery may want to provide a one-time initial notice, as outlined in the proposed regulations, to any participants and beneficiaries who are newly eligible during the 2026 calendar year.

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group will continue to monitor developments and will post updates on the Employee Benefits and Executive Compensation blog as additional information becomes available.

Katrina M. Clingerman is a shareholder in the Indianapolis office of Ogletree Deakins.

David S. Rosner is a shareholder in the Washington, D.C., office of Ogletree Deakins.

Chris Moyers, a paralegal in the Richmond office of Ogletree Deakins, contributed to this article.

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Quick Hits

• A new law in Nebraska (Legislative Bill 921) requires employers with one hundred or more workers to provide notice at least ninety days before a mass layoff or business closing.
• The law stipulates certain information that must be included in the layoff notices and how the notices may be delivered.
• The law will take effect on July 18, 2026.

Nebraska’s mini-WARN Act, enacted under Legislative Bill (LB) 921, defines “mass layoff” as a “reduction in employment force that is not the result of a business closing and results in an employment loss at a single site of employment during any thirty-day period of one hundred or more employees,” not including part-time employees.

A business closing means “the permanent or temporary shutdown of a single site of employment of one or more facilities or operating units that will result in an employment loss for one hundred or more employees, other than part-time employees.”

The law defines “employment loss” as an “employment termination, other than a discharge for cause, voluntary separation, or retirement; a layoff exceeding six months; or a reduction in hours of more than 50 percent of work of individual employees during each month of a six-month period.” This does not include instances when a business closing or mass layoff is the result of a relocation or business consolidation, and the employee has an opportunity to transfer within a reasonable commuting distance with no more than a six-month break in employment.

The definition of “Part-time employee” includes employees who are employed for an average of less than twenty hours per week and any employees, including full-time employees, who are employed for less than six of the twelve months preceding the date on which notice is required.

Ninety days prior to the implementation of a mass layoff or covered business closing, WARN notices must be provided to affected employees or their bargaining representative, if unionized, and the Nebraska Department of Labor (NDOL). The Nebraska WARN notices must contain the following information:

• the name and address of the worksite where the business closing or mass layoff will occur;
• the name and telephone number of a company official to contact for further information;
• a statement indicating whether the planned action is expected to be permanent or temporary and, if the entire business is to be closed, a statement to that effect;
• the expected date of the first employment loss and the anticipated schedule for employment losses;
• the job titles of positions to be affected and the names of all employees currently holding the affected jobs; and
• copies of all employee handbooks, personnel policies, and employment-related policies applicable to the affected employees, or a statement identifying the specific online location where such handbooks or policies can be accessed.

In addition, the notice provided to the NDOL must contain the addresses of affected employees and, if applicable, a statement that the employees are covered by a collective bargaining agreement.

Employers may send written notices by any reasonable method designed to ensure receipt at least ninety days before a layoff, including by first-class mail, email, online company portal, or inserting the notice into pay envelopes. The employer also must post the notice in a conspicuous location in every language spoken by at least 5 percent of the workforce.

For WARN calculations and notice purposes, it is recommended that remote employees be included with the location assigned as their home base, the location from which their work is assigned, or the worksite to which they report. Even though part-time employees are not included in the calculation for triggering WARN notice requirements, they are entitled to receive advance notice of a mass layoff or business closing when they are impacted.

Additional notice is required when the date of the planned closing or mass layoff changes. Postponements of thirty days or less from the originally announced date require notices to include reference to the earlier notice, the date to which the planned action is postponed, and the reasons for the postponement. Postponements of more than thirty days require entirely new notices. When the subsequent notice is given, the employer must provide an explanation for why it reduced the notice period.

Nebraska’s law provides an exception to the notice requirements for business closings and mass layoffs if there is a natural disaster (such as an earthquake, flood, tornado, storms, or drought) or unforeseeable business circumstances, meaning a circumstance “caused by some sudden, dramatic, and unexpected action or condition outside the employer’s control.” For business closings only, the notice period is not required when the business closing follows failed efforts to obtain adequate capital or financing.

Nebraska’s law differs from the federal Worker Adjustment and Retraining Notification (WARN) Act in certain details. Nebraska specifically permits pay-in-lieu of notice. The federal law does not preempt Nebraska’s law. Nebraska is one of a growing number of states that have enacted their own mini-WARN Acts in recent years, including Maryland, Ohio, and Washington. Many of the state laws have more stringent requirements than those in the federal law.

Next Steps

Nebraska’s WARN provisions will take effect on July 18, 2026. Employers may wish to ensure that their records of employees’ names, job titles, and locations are accurate. They may wish to update any notice templates and posters to ensure compliance with the new law. For businesses planning a reduction in force in the near future, it may be necessary to adjust the timing to allow for a ninety-day notice period. Aggregation of multiple reductions in force during a ninety-day period may be required.

Employers that violate the state law may be fined up to $100 for each day of the violation. There is no private right of action under the Nebraska mini-WARN law.

Ogletree Deakins’ RIF/WARN Practice Group will continue to monitor developments and will post updates on the Nebraska and Reductions in Force blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal covers updates on a wide range of state and federal laws on Terminations and Reductions-in-Force, including WARN and mini-WARN laws such as Nebraska’s new law. The Portal will soon feature new notice documents, available to Advanced and Premium subscribers, who also have access to step-by-step Task walkthroughs on Terminations and RIFs and Closures. All clients have access to snapshots and updates. For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

David L. Zwisler is a shareholder in Ogletree Deakins’ Denver office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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Time is Ticking on the 119th Congress. Both the U.S. Senate and U.S. House of Representatives returned to Washington, D.C., after being out last week. Believe it or not, with the mid-term elections, scheduled breaks, and holidays, there are not many days left in the 119th Congress in which the Senate and House will both be present in Washington, D.C. For example, there are only twenty-four such days until the August Recess, thirty-five such days until current government funding expires, and thirty-six such days until the midterm elections. Following the elections, there will be a lame-duck legislative session lasting approximately four weeks. Congress has a lot to do and little time to do it. And because all bills expire at the end of this current Congress (on January 3, 2027), these next few months could be a period of significant legislative activity, though most employment-related bills are still unlikely to be enacted, mostly due to the legislative filibuster in the Senate.

DOL Officially Reinstates 2019 Overtime Regulations. The U.S. Department of Labor (DOL) performed some regulatory housekeeping this week as a result of its recent decision to drop its defense of the 2024 Fair Labor Standards Act overtime regulations. On May 15, 2026, the DOL published a final rule in the Federal Register that scrubs the Code of Federal Regulations (CFR) to remove the Biden-era regulation promulgated in 2024 and to reinstate the 2019 regulations issued during the first Trump administration. The 2019 regulations have been the standard that the DOL has enforced since the Biden-era rule was vacated in November 2024. As the notice describes, “[T]his final rule merely conforms the text in the CFR to reflect the courts’ vacatur of the 2024 rule by removing the 2024 rule regulatory text and replacing it with the text from the 2019 rule.” Keith E. Kopplin and Zachary V. Zagger have the details.

“Faster Labor Contracts Act” Picks Up Steam. The Buzz is monitoring the ongoing effort in the House to force a vote on the Faster Labor Contracts Act. The pending discharge petition has been signed by 214 representatives—just 4 signatures short of the 218 required to force a vote on the House floor. Four Republicans have now signed the petition.

House Lawmakers Examine Workplace Safety Innovations. On May 13, 2026, the House Subcommittee on Workforce Protections held a hearing, titled, “Building a Safer Future: Private-Sector Strategies for Emerging Safety Issues.” The hearing focused on how employer-sponsored initiatives, such as the adoption of new technologies, can advance workplace safety even in the absence of prescriptive standards. Ogletree Deakins shareholder, Melissa K. Peters, who testified at the hearing, warned against the Occupational Safety and Health Administration’s (OSHA) preference for prescriptive rulemaking, which takes too long and is “too rigid to keep pace with technology and too broad to reflect the disparateness of the regulated workforce.” Instead, Peters advocated for performance-based or goal-focused standards that allow employers to “calibrate their programs to the actual hazards they face and let[] recent technology satisfy the rule without waiting for OSHA to catch up.” According to Peters, OSHA’s pending heat injury and illness prevention standard would benefit. Peters further recommended that OSHA take a performance-based approach, should the agency choose to proceed with its pending heat injury and illness prevention standard.

House to Vote on Student-Athlete Reform Bill. Next week, the House is expected to vote on the “Student Compensation and Opportunity through Rights and Endorsements (SCORE) Act,” which would set new rules for the college athletics landscape. This includes protecting student-athletes’ ability to enter into “name, image, and likeness” (NIL) licensing agreements, changing coaches’ hiring timelines, and setting a five-year eligibility cap for student-athletes. But at the Buzz, we are most interested in provisions of the bill that would expressly prohibit student-athletes from being classified as “employees.” This bill came close to a floor vote in the House several months ago, but it was pulled at the last minute. The Buzz will have more on this next week.

Discharge Deep Dive. The House rule allowing members to discharge bills stuck in committees, as discussed above in relation to the Faster Labor Contracts Act, is a relatively new congressional phenomenon. The first iteration of the rule was adopted in 1910 as part of a series of maneuvers to check the power of then-Speaker Joseph Cannon, a Republican from Illinois. The process has changed over the ensuing years. In the 1930s, the number of required signatories was lowered from 145 (one-third of the House) to 218—a simple majority. The signatories to discharge petitions were never publicly disclosed until a 1993 rule change championed by then-representative James Inhofe of Oklahoma made the entire process transparent.

Measuring the success of discharge petitions has proved difficult, as the filing of a petition sometimes prompts leadership to take up the underlying bill, and the petition effort is subsequently abandoned. However, at least one estimate claims that of the 635 discharge petitions filed between 1935 and 2023, less than 4 percent have garnered the necessary 218 signatories. Of those, only four discharge efforts—at most—have ever resulted in enacted legislation during that time frame. The first of these successful efforts was the Fair Labor Standards Act of 1938, a frequent topic here at the Buzz.

Employers should not assume that current reporting obligations have changed until the EEOC takes further action. Employers may wish to monitor OMB and EEOC developments as this proposal raises questions about the timing of the 2025 EEO-1 filing cycle and as to whether these reports will be collected.

This is a developing story. Ogletree Deakins’ Diversity, Equity, and Inclusion Compliance Practice Group and Government Contracting and Compliance Practice Group will continue to monitor developments and provide updates on the Diversity, Equity, and Inclusion Compliance and Government Contracting and Compliance blogs as additional information becomes available.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

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Quick Hits

• Golf courses and resorts tend to rely on seasonal hiring for the summer.
• Overtime pay, minimum wage, and child labor laws typically apply to part-time, seasonal workers.
• Golf resorts have legal obligations to prevent workplace safety hazards, including the risk of heat-related illness.

Arizona, California, Florida, Michigan, and South Carolina have abundant golf tourism and high concentrations of golf courses. During the warmer months, golf facilities often rely on seasonal hiring and a significant influx of temporary staff to work as caddies, cart attendants, pro shop clerks, groundskeepers, bartenders, and restaurant servers.

Many seasonal employees are hourly workers who may qualify for overtime pay and minimum wage under federal, state, or local laws. The minimum wage and child labor laws vary widely by state. Some states restrict the total number of hours minors can work per week, and that threshold may be different when school is not in session. Some states require permits for minors to work, and others don’t.

Employers that fail to pay minimum wage or overtime in violation of the Fair Labor Standards Act (FLSA) may be subject to fines, back pay, liquidated damages, and attorneys’ fees. Violations of child labor laws can result in fines of up to $16,000 or criminal prosecution.

Caddies, beverage cart attendants, restaurant servers, and bartenders are often tipped positions. If the employer takes a tip credit from the minimum wage in a state where a tip credit is permitted, it’s important to make sure (1) that all tips, whether paid by credit card, electronic payment, or cash, are documented sufficiently to ensure that the employee earns at least the minimum wage for each hour worked when tips are taken into account; (2) that if there is a tip pool arrangement, improper employees are not included in the tip pool; and (3) the employer does not retain any portion of the tips paid to the tipped employees.

Improperly including supervisors, managers, or employees who do not customarily and regularly receive tips (e.g., people who repair or wash golf carts or stock beverages on those carts, but don’t serve them) may invalidate the tip pool, and thus the tip credit, for all affected employees.

Workers With Visas

Many employers in the hospitality and tourism industries rely on foreign workers during peak seasons. The H-2B visa program allows U.S. employers to hire foreign citizens for temporary, seasonal, nonagricultural jobs. Employers seeking H-2B visas must establish that they have a seasonal need and that there are not enough U.S. citizens who are willing, able, and qualified to do the seasonal work.

The H-2B program is coordinated by the U.S. Department of Labor (DOL) and U.S. Citizenship and Immigration Services (USCIS) and requires approval from both agencies. An employer must obtain an occupational classification and prevailing wage from the DOL, obtain certification on their temporary need, and then petition for approval from USCIS. To receive an H-2B visa, foreign workers must have a valid, temporary job offer, meet the requirements for the position, and if needed, obtain an H-2B visa. Workers must be paid at least the prevailing wage set by the DOL.

H-2B slots are allocated based on a lottery system, and for the last several years demand has greatly exceeded supply. If employers are interested in this option for a temporary workforce, the process should be started at least six months in advance.

Workplace Safety

The general duty clause of the Occupational Safety and Health (OSH) Act requires employers to maintain a workplace free from recognized hazards causing or likely to cause death or serious physical harm. That may include hazards related to heat exposure, golf carts, lawnmowers, and chemical exposure from pesticides and fertilizers.

They can reduce risks by providing rest breaks, shade, and personal protective equipment, such as gloves, safety goggles, and steel-toed boots. They also can decrease risks by enforcing golf cart safety rules for employees and completing regular maintenance for golf carts and landscaping equipment.

Next Steps

Golf facilities hiring seasonal workers may wish to review their minimum wage and overtime pay policies and practices to ensure compliance with local, state, and federal laws. They may wish to coordinate with third-party payroll vendors to ensure accurate recordkeeping and proper payments.

Golf facilities may wish to promptly address any foreseeable workplace hazards and take internal reports about workplace hazards seriously. They may wish to regularly train managers and employees on heat illness prevention, safe equipment handling, safe chemical application, emergency procedures, and first aid.

Ogletree Deakins’ Hospitality Practice Group will continue to monitor developments and will post updates on the Employment Law, Hospitality, Immigration, Wage and Hour, and Workplace Safety and Health blogs as additional information becomes available.

Marissa E. Cwik is a shareholder in Ogletree Deakins’ Denver office.

R. Scott Deluca is Of Counsel in Ogletree Deakins’ Buffalo office.

Christopher P. Hammon is a shareholder in Ogletree Deakins’ Miami office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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Quick Hits

• The determination as to who qualifies as a “subcontractor” is not always straightforward and carries real compliance risk if done incorrectly.
• The FAR and relevant case law reinforce a functional definition of “subcontractor” focused less on how a relationship is labeled and more on whether a vendor provides goods or services for the performance of the prime contract and whether the work is essential to contract performance.
• Contractors can apply a practical, nexus-based framework to assess whether a vendor’s role ties directly to statement-of-work requirements.

Under-inclusion of vendors and suppliers for the purposes of compliance with the FAR and executive orders can create a risk of noncompliance with the prime contract, whereas over-inclusion may create friction with vendors, particularly commercial suppliers that resist the inclusion of government-unique terms in their agreements. While the definition of “subcontractor” is broad, there is a practical, workable way to determine which vendors qualify as subcontractors for the purposes of these compliance obligations.

Background

Executive Order (EO) 14398, “Addressing DEI Discrimination by Federal Contractors,” issued March 26, 2026, and its implementing FAR clause, 52.222-90, introduced new compliance requirements aimed at addressing employment-related matters in federal contracting. EO 14398 and FAR 52.222-90 require contractors to flow down new compliance obligations to subcontractors and monitor certain subcontractor conduct. Among other things, prime contractors are required to “report any subcontractor’s known or reasonably knowable conduct that may violate th[e] clause,” to “inform the Contracting Officer if a subcontractor sues the Contractor and the suit puts at issue, in any way, the validity of th[e] clause,” and to flow down the clause into “subcontracts at any tier, including those for commercial products and commercial services.”

‘Subcontractor’ Defined

Procurement regulations and statutes, and related case law, provide a broad but functional definition of “subcontractor” that offers an analytical framework for understanding whether a vendor/supplier/consultant providing a contractor with goods or services is a “subcontractor” under the FAR.

The FAR defines “subcontract” as “any contract … entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract.” The Anti-Kick Back Act defines “subcontractor” to mean “a person, other than the prime contractor, that offers to furnish or furnishes supplies, materials, equipment, or services of any kind under a prime contract or a subcontract entered into in connection with the prime contract.”

The language of these definitions is expansive yet focuses not on how an agreement is labeled, but on whether its purpose is to deliver goods or services to support the prime contractor’s performance of the prime contract. Although sparse, the case law addressing who is a subcontractor puts a finer point on these definitions by connecting the importance of the vendor’s goods or services to the prime contractor’s performance of the government contract.

In General Injectables & Vaccines, Inc., ASBCA No. 54930, 06-2 B.C.A. (CCH) ¶ 33401 (Aug. 31, 2006), a contractor that promised to deliver flu vaccines to the Defense Logistics Agency argued that its failure to deliver the vaccines should be excused because the manufacturer of the vaccine had its license suspended—a condition the contractor argued it was not responsible for. The board disagreed, reasoning that the manufacturer’s “performance was essential to the enterprise and its failures were [the contractor’s] failures, and its role as the supplier of the vaccine to [the contractor] made it [the contractor’s] subcontractor by any rational definition of that term.”

The takeaway is that, labels aside, where a vendor furnishes goods or services essential to the performance of the prime contract, the vendor is more likely to be a subcontractor for FAR compliance purposes.

There remain cases that a strict causation analysis may not neatly resolve, such as vendors whose goods or services can connect to the prime contractor’s performance obligations at some downstream point in the supply chain, or that support the prime’s enterprise operations generally with only ancillary benefits to its government work. Determining whether these vendors are “subcontractors” under the FAR may be a judgment call.

Identifying Subcontractors

The regulatory definition of “subcontractor” and the way courts have applied that definition show that identifying subcontractors calls for an inquiry into the proximate role a vendor plays in the contractor’s performance of a government contract. Accordingly, contractors can examine the following factors:

• Are the vendor’s goods or services used in the performance of the contract in any way?
• If yes, are those goods or services being used to carry out the contract’s statement-of-work requirements, as opposed to supporting the company’s general business operations?
• Is there a meaningful nexus between the vendor’s work and the contract’s deliverables such that the vendor’s contribution is integral, or “essential to the enterprise,” in meeting the prime contract’s requirements? Where that connection exists, the vendor is likely to fall within the FAR’s definition of a “subcontractor,” regardless of how the relationship is labeled.

Examples

The following examples illustrate how this analytical framework may apply in practice across common vendor relationships.

• Vendors performing statement-of-work requirements. If a vendor is performing a portion of the prime contract’s statement of work, it is likely a subcontractor.
• Product and equipment suppliers. Suppliers providing items that are incorporated into the contract’s deliverables are typically subcontractors. Even commercial item suppliers can fall into this category if their products are used to meet contract requirements.
• Professional services supporting contract performance. Consultants, engineers, or subject-matter experts engaged specifically to support contract deliverables will usually be subcontractors. The key is whether their work ties directly to the contract.
• Enterprise support vendors. Vendors providing services such as HR support, IT infrastructure, accounting, or general staffing across the company are not automatically subcontractors. In such situations, the question is whether the vendor’s work is tied to the government contract or to the company’s general operations. If a staffing firm provides personnel assigned specifically to perform contract work, that firm is more likely to be considered a subcontractor. If the same firm provides general workforce support across the enterprise, it may not be.
• Mixed-use vendors. Some vendors support both contract performance and general operations. In those cases, contractors may need to assess whether the portion of work tied to the government contract is identifiable and significant. If so, treating the vendor as a subcontractor may be the safer approach. A useful question is whether the vendor’s services would still be needed or required by the contractor in the absence of the government contract.

Key Takeaways

Contractors do not need a perfect legal test; they need a workable screening process. A practical approach is to ask one basic question during vendor onboarding or contract review: could we perform this government contract, or perform it as required, without this vendor’s goods or services? If the answer is no, the vendor likely falls within the FAR concept of a subcontractor, and flow-down of FAR 52.222-90 should be strongly considered.

Ogletree Deakins’ Diversity, Equity, and Inclusion Compliance Practice Group, Government Contracting and Compliance Practice Group, and Workforce Analytics and Compliance Practice Group will continue to monitor developments and provide updates on the Diversity, Equity, and Inclusion Compliance, Government Contracting and Compliance, and Workforce Analytics and Compliance blogs as additional information becomes available.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

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Quick Hits

• The Supreme Court recently found that freight brokers can be sued for negligent hiring after accidents involving motor carriers selected for interstate transport of goods.
• The FAAAA does not override state laws concerning negligent hiring of unsafe motor carriers.

The FAAAA preempts state laws related to prices, routes, and services for commercial trucking companies and brokers. However, a safety exception allows states to maintain safety regulatory authority with regard to motor vehicles.

In this case, the plaintiff was severely injured when his tractor-trailer was hit by another tractor-trailer on an Illinois highway. He sued the driver, the trucking company, and the freight broker. He alleged that the freight broker negligently hired the trucking company and the driver.

The Supreme Court weighed whether the safety exception may apply when there is a common-law claim alleging a freight broker was negligent when it selected a motor carrier to transport cargo. If preempted, remedies are significantly limited. Freight brokers are logistics professionals that connect businesses with carriers to transport products.

The Court found that the plaintiff’s negligent-hiring claim fell within the FAAAA’s safety exception and therefore was not preempted. “A claim that one company negligently hired another to transport goods is not preempted by the FAAAA because states retain authority to regulate safety ‘with respect to motor vehicles’ under the Act,” the Court stated.

Ogletree Deakins’ Trucking and Logistics Industry Group and Workplace Safety and Health Practice Group will continue to monitor developments and will post updates on the Trucking and Logistics and Workplace Safety and Health blogs as additional information becomes available.

Kevin P. Hishta is a shareholder in Ogletree Deakins’ Atlanta office.

Robert P. Roginson is a shareholder in Ogletree Deakins’ Los Angeles office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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Quick Hits

• In a unanimous decision, the Supreme Court ruled that federal courts that have stayed claims in pending actions under Section 3 of the FAA maintain jurisdiction to confirm or vacate the resulting arbitral awards under sections 9 and 10 of the FAA.
• In this case, the original employment discrimination claims were sufficient to establish the federal district court’s jurisdiction. The Court ruled that the original claims also established that court’s “authority to resolve the motions to confirm or vacate the arbitral award resolving those claims.”
• According to the Court, “nothing in the FAA precludes the normal operation of federal jurisdiction.”

In Jules v. Andre Balazs Properties, No. 25–83, the Court affirmed a Second Circuit Court of Appeals ruling that a federal district court did have jurisdiction to confirm an arbitration award (in a case stemming from an employment discrimination dispute). According to Justice Sotomayor, who authored the opinion of the unanimous Court, “[b]ecause a federal court in this scenario has jurisdiction over the original claims and does not lose that jurisdiction while the case is stayed pending arbitration, it retains jurisdiction to determine whether the arbitral award resolving those claims is valid and should be confirmed.”

In the underlying case, Justice Sotomayor noted, the district court had original jurisdiction over the employee’s federal claims. “It was this very jurisdiction that authorized the court to adjudicate the arbitrability of [the employee’s] claims under the parties’ contract to begin with, before staying litigation pending arbitration. Nothing in the FAA eliminated that jurisdiction while the parties arbitrated,” she wrote.

Questions about federal courts’ jurisdiction over motions to compel arbitration and motions to confirm, vacate, or modify arbitration awards under the FAA can become complicated. Such jurisdiction may depend on whether there are federal or state underlying claims at issue. For further analysis of recent Supreme Court decisions in this area, see our prior articles “Supreme Court Rules FAA Requires Courts to Grant Stay Requests After Compelling Arbitration” and “Supreme Court’s New Arbitration Ruling: Limits Federal Jurisdiction For Confirming or Challenging Arbitration Awards Under the FAA.”

Ogletree Deakins’ Arbitration and Alternative Dispute Resolution Practice Group will continue to monitor developments and will provide updates on the Arbitration and Alternative Dispute Resolution blog as additional information becomes available.

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