New Executive Order “Fair Pay and Safe Workplaces” Will Impact Contractors

Will some contractors determine that it is no longer worth doing business with the government?

The Fair Pay and Safe Workplaces EO (Executive Order), is the latest executive order signed by Obama, will require companies bidding on federal contracts to disclose labor violations.  The reporting of labor law violations would cover a 3-year time-frame and would include safety, FMLA, wage, and hour, collective bargaining, civil rights protections, and other offenses. The law could lead to potential contractors being passed over and other businesses to decide not to bid at all. The new EO will cover approximately twenty-eight million employees and impact an estimated 24,000 companies that would bid on contracts worth more than $500,000 and becomes effective in 2016. Democratic lawmakers and labor unions praised the decision.  

A Few Details

  • Employers with contracts of $1 Million or more are “not to require their employees to enter into pre-dispute 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).”
  • The employer must make available to employees information relating to hours worked, overtime hours, pay, and any additions or deductions made from their pay.
  • While the primary focus is on employers that demonstrate recidivism, one violation could be enough to be barred from receiving future contracts.
  • The EO is vague, and Obama stated that the administration would emphasize compliance and not punishment and work with businesses.
  • Employers with labor law violations will have an opportunity to remedy any problems.
  • Listening sessions will be held to educate businesses on how the EO will be implemented.
  • The new EO comes one day after the House of Representatives approved a vote to proceed with a lawsuit against Obama.
  • Regulations will follow and a public comment period.

This is a real game-changer for companies bidding on federal contracts.  HR departments need to coordinate closely with the company’s Sales or Contracting Department to ensure that they are aware of labor law violations that could impact their doing business with the government. Click here to read the full press release from the White House

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