What is a Labor Surplus Area? A Comprehensive Legal Overview

Q: How is a labor surplus area determined?

It is determined based on the average unemployment rate compared to the national average over a specific period.

Q: Can businesses in labor surplus areas receive federal contracts?

Yes, businesses in these areas may receive preferences when bidding for federal contracts.

Definition & Meaning

A labor surplus area (LSA) is a region designated by the government that has experienced significant unemployment. These areas are identified annually through a survey conducted by the U.S. Department of Labor (DOL). The designation aims to link federal procurement policies with efforts to reduce unemployment.

According to the DOL, a labor surplus area is defined as a civil jurisdiction"such as a city or county"where the average unemployment rate is at least 20 percent higher than the national average over the previous two years. In times of high national unemployment, this threshold is adjusted, and areas with an unemployment rate of 10 percent or more may also qualify.

Table of content

Legal Use & context

Labor surplus areas are primarily used in federal procurement policies. The designation allows employers in these areas to receive preferences when bidding for federal contracts. This is governed by:

Executive Order 12073, which focuses on federal procurement in LSAs.
Executive Order 10582, which implements the Buy American Act.

Legal practitioners may encounter LSAs when advising businesses on federal contracting opportunities or when discussing unemployment-related programs. Users can manage some related processes using legal templates provided by US Legal Forms.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

For instance, if a city has an unemployment rate of 8 percent while the national average is 5.8 percent, it may qualify as a labor surplus area if the national unemployment rate rises significantly. This designation can help local businesses secure federal contracts and improve economic conditions in the area.

Relevant laws & statutes

Key legal references for labor surplus areas include:

Executive Order 12073
Executive Order 10582

These orders provide the framework for federal contracting preferences in designated LSAs.

State-by-state differences

Examples of state differences (not exhaustive):

State	Labor Surplus Area Criteria
Michigan	Includes townships with populations of 25,000 or more.
New York	Similar criteria as Michigan; townships qualify.
Connecticut	Designates towns due to limited county functions.

This is not a complete list. State laws vary, and users should consult local rules for specific guidance.

Comparison with related terms

Term	Definition
Labor Surplus Area	A region with high unemployment, designated for federal procurement preferences.
Tight Labor Market	A condition of low unemployment, often leading to higher wages and difficulty in staffing.

Common misunderstandings

What to do if this term applies to you

If you are located in a labor surplus area, consider exploring federal contracting opportunities. You can use US Legal Forms to find templates that may assist you in navigating the bidding process. If your situation is complex, seeking professional legal advice may be beneficial.

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Quick facts

Designation based on unemployment rates.
Annual review by the U.S. Department of Labor.
Federal procurement preferences apply to designated areas.

Key takeaways

Frequently asked questions

What is a labor surplus area?

A labor surplus area is a region with significant unemployment, designated by the government for federal procurement preferences.