Fair Pay and Safe Workplaces: Impact on Contractors
On July 31, 2014, President Obama signed Executive Order 13673, entitled Fair Pay and Safe Workplaces. This order imposes several new obligations on federal contractors, including:
- Disclosure of specific labor and employment law violations over the prior three years
- Disclosures to employees and independent contractors of specific wage-related information
- A ban on certain types of arbitration agreements
While the Executive Order is in effect immediately, it will be implemented in 2016, by stages on a prioritized basis. Guidance and regulations from the Federal Acquisition Regulation (FAR) and the Secretary of Labor will provide clarification on the application of the order. While awaiting the accompanying regulations, federal contractors should get a head start by evaluating all current programs that could possibly be impacted by the order.
The range of this is far reaching and applies to companies seeking contracts over $500,000. Those prospective contractors are to disclose violations relating to a number of federal laws and their state counterparts, (yet to be determined). The federal laws covered by this requirement include:
- The Fair Labor Standards Act (FLSA)
- The Occupational Safety and Health Act of 1970 (OSHA)
- The Migrant and Seasonal Agricultural Worker Protection Act
- The National Labor Relations Act (NLRA)
- The Davis-Beacon Act
- The Service Contract Act
- Executive Order 11246
- Executive Order 13658
- Section 503 of the Rehabilitation Act of 1973
- The Vietnam Veterans’ Readjustment Assistance Act
- The Family and Medical Leave Act (FMLA)
- Title VII of the Civil Rights Act of 1964
- The Americans with Disabilities Act of 1990 (ADA)
- The Age Discrimination in Employment Act of 1967 (ADEA)
- Equivalent state laws as defined by yet to be released guidance to be supplied by the US Department of Labor
Agencies will also require contractors to collect similar information from many of their subcontractors.
According to a White House fact sheet, in 2010, the Government Accountability Office issued a report finding that almost two-thirds of the 50 largest wage-and-hour violations and almost 40 percent of the 50 largest workplace health-and-safety penalties issued between FY 2005 and FY 2009 were at companies that went on to receive new government contracts.
Moving forward, contracting officers will take into account serious violations and repeat offenders. Each agency is to designate a senior official to provide guidance as to whether a contractor’s actions rise to the level that would make them a candidate for debarment from the contracting process. This process should have the effect of making debarment from the federal contractive process a very real possibility for repeat offenders. Contractors should be vigilant with their compliance efforts, and continue to constantly hone their processes and controls. The list of state laws applicable to this order should be released in the coming months, and we will provide further information when that occurs.
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