New Executive Order Requires Federal Contractors to Disclose Workplace Violations

On July 31, 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order requiring contractors entering into contracts with the federal government for more than $500,000 to disclose labor law violations from the past three years before they can be awarded a contract. Contractors must disclose any violations of 14 federal and state statutes, including the Fair Labor Standards Act, the Family and Medical Leave Act, the Occupational Safety and Health Act, and the National Labor Relations Act.

According to the White House, contracting officers will take into account the most egregious violations, and “ensure that the worst actors, who repeatedly violate the rights of their workers and put them in danger, don’t get contracts and thus can’t delay important projects and waste taxpayer money.” The order directs the General Services Administration to develop a single website for contractors to meet their reporting requirements, and that Federal Acquisition Regulations be amended to incorporate these changes.

In addition, companies with federal contracts of $1 million or more must obtain employee consent to arbitrate claims arising out of Title VII of the Civil Rights Act based on sexual assault or harassment. Contractors with collective bargaining agreements or contracts already in place on the effective date may not be covered by this post-dispute consent requirement.

The order also requires contractors to give non-exempt employees information on each paycheck concerning hours worked, overtime hours, pay, additions or deletions to pay, and whether the contractor considers them an independent contractor.

The administrative cost to comply with these new requirements is significant. Companies must assess these added costs when bidding for government contracts. MSEC will continue to provide updates on this matter. Members may contact Affirmative Action Planning Services at 800.884.1328 or with questions.