As a result of an Executive Order, signed by President Obama on July 31, 2014, prospective federal contractors will be required to disclose labor law violations from the past three years before they can get a contract.
It should be pointed out that this Executive Order applies to Contractors that enter into contracts directly with the federal government. Most projects funded with federal dollars flow through MDOT or Local Agencies and the contract is between that agency and the Contractor not the federal government.
The Fair Pay and Safe Workplaces Executive Order will govern new federal procurement where the estimated value of the supplies acquired and services required exceeds $500,000 and require information regarding companies’ compliance with the following federal labor laws for agencies and Executive Orders (labor laws):
(A) the Fair Labor Standards Act;
(B) the Occupational Safety and Health Act of 1970;
(C) the Migrant and Seasonal Agricultural Worker Protection Act;
(D) the National Labor Relations Act;
(E) 40 U.S.C. chapter 31, subchapter IV, also known as the Davis-Bacon Act;
(F) 41 U.S.C. chapter 67, also known as the Service Contract Act;
(G) Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity);
(H) section 503 of the Rehabilitation Act of 1973;
(I) 38 U.S.C. 3696, 3698, 3699, 4214, 4301-4306, also known as the Vietnam Era Veterans’ Readjustment Assistance Act of 1974;
(J) the Family and Medical Leave Act;
(K) title VII of the Civil Rights Act of 1964;
(L) the Americans with Disabilities Act of 1990;
(M) the Age Discrimination in Employment Act of 1967;
(N) Executive Order 13658 of February 12, 2014 (Establishing a Minimum Wage for Contractors); or
(O) equivalent State laws, as defined in guidance issued by the Department of Labor.
A few key items outlined in the Executive Order are:
1. Hold Corporations Accountable: Under the terms of the Executive Order, agencies will require prospective contractors to disclose labor law violations from the past three years before they can get a contract. The 14 covered federal statutes and equivalent state laws include those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections. Agencies will also require contractors to collect similar information from many of their subcontractors.
2. Crack Down on Repeat Violators: Contracting officers will take into account only the most egregious violations, and each agency will designate a senior official as a Labor Compliance Advisor to provide consistent guidance on whether contractors’ actions rise to the level of a lack of integrity or business ethics.
3. Promote Efficient Federal Contracting: Federal agencies risk poor performance by awarding contracts to companies with a history of labor law violations. Because the companies with workplace violations are more likely to encounter performance problems, the Executive Order will also improve the efficiency of federal contracting and result in greater returns on federal tax dollars.
4. Protect Responsible Contractors: The vast majority of federal contractors have clean records. The Department of Labor estimates that the overwhelming majority of companies with federal contracts have no federal workplace violations in the past three years. Contractors who invest in their workers’ safety and maintain a fair and equitable workplace shouldn’t have to compete with contractors who offer low-ball bids—based on savings from skirting the law—and then ultimately deliver poorer performance to taxpayers.
5. Focus on Helping Companies Improve: The goal of the process created by the Executive Order is to help more contractors come into compliance with workplace protections, not to deny contracts to contractors. Companies with labor law violations will be offered the opportunity to receive early guidance on whether those violations are potentially problematic and remedy any problems.
6. Give Employees a Day in Court: The Executive Order directs companies with federal contracts of $1 million or more not to require their employees to enter into predispute arbitration agreements for disputes arising out of Title VII of the Civil Rights Act or from torts related to sexual assault or harassment (except when valid contracts already exist).
7. Give Employees Information About their Paychecks: As a normal part of doing business, most employers give their workers a pay stub with basic information about their hours and wages. To be sure that all workers get this basic information, the Executive Order requires contractors to give their employees information concerning their hours worked, overtime hours, pay, and any additions to or deductions made from their pay, so workers can be sure they’re getting paid what they’re owed.
The Federal Acquisition Regulation Council will be issuing additional rules, procedures, and compliance guidelines.
Click here to view the signed “Executive Order –Fair Pay and Safe Workplaces”
If you have any questions or comments contact Glenn Bukoski at glennbukoski@mi-ita.com or Doug Needham at douglasneedham@mi-ita.com or call them at the MITA office at 517-347-8336.
