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Executive Order 13673: Fair Pay and Safe Workplaces

Notice

Frequently asked Questions

Overview and Background

1. What is the Fair Pay and Safe Workplaces Executive Order? How will the public benefit from implementation of the Executive Order?

2. What documents govern and guide implementation of the FPSW Order?

3. Will FPSW implementation slow down the procurement process?

4. Are there significant differences between the proposed FPSW rule and the final rule?

Implementation Schedule

5. When does the FPSW Order take effect?

Disclosure of Labor Violations

6. How will contractors disclose their history of labor violations?

7. Which violations of workplace protections must be disclosed?

8. Will contractor disclosures regarding workplace violations be made public?

9. Will contractors with labor violations have an opportunity to present information on their remediation steps?

10. How can communities participate in this process?

Scope of Coverage

11. How many contractors will be impacted?

12. What types of contracts are covered?

Compliance Assistance and Burden on Contractors

13. What steps have been taken to reduce the burden of this EO on federal contractors?

14. What assistance is there for small businesses and minority contractors who may have greater difficulty in complying with the Executive Order?

Additional Questions Regarding Labor Violations

15. Some of the administrative merits determinations that contractors must disclose are complaints issued by enforcement agencies. Shouldn't a finding be required before contractors must disclose a violation, rather than a mere complaint?

16. Are contracting officers concerned with all types of violations?

17. Will a contractor lose federal contracts for a single violation?

18. Can a contract be denied or taken away based solely on employee allegations?

19. Will contractors have to address all existing violations before getting a contract?

20 What responsibilities do prime contractors have with regard to subcontractors' violations?

Relationship to Suspension and Debarment

21. How is this different from the existing Suspension and Debarment procedures?




Overview and Background

1. What is the Fair Pay and Safe Workplaces Executive Order? How will the public benefit from implementation of the Executive Order?

On July 31, 2014, President Obama signed Executive Order 13673, Fair Pay and Safe Workplaces (FPSW), to promote safe, healthy, fair, and effective workplaces. The Order is designed to increase efficiency and cost savings in federal contracting by ensuring that the parties with which the Government contracts are responsible and provide basic workplace protections. The federal government should be doing business only with companies that comply with laws that protect workers' safety, wages, and civil rights. Contractors that consistently adhere to labor laws are more likely to have workplace practices that enhance productivity and produce good results.

The Order will require prospective federal contractors to disclose their violations of certain workplace protection laws before receiving a contract award. Agencies will use this information to determine whether prospective contractors are responsible sources that should be awarded contracts. For those contractors that are not in compliance, agencies will work with them to make sure they understand their responsibilities and try to address any issues that can be remedied to bring them into compliance.

Taking these steps will also help to ensure that companies that play by the rules do not have to compete against those who put in lower offers by cutting corners on workers' pay and safety. And it will help to ensure that all hardworking Americans get the fair pay and safe workplaces they deserve.

The Order reinforces current federal procurement procedures. Existing law requires federal agencies to contract only with "responsible" sources. To implement this responsibility requirement, an agency contracting officer must make an affirmative determination of a contractor's responsibility before the contracting officer makes any contract award. Under existing law, a contractor must have "a satisfactory record of integrity and business ethics" to be a responsible source. To strengthen this requirement, the Order now instructs contracting officers to consider whether a contractor has a history of certain labor law violations within the last three years as a factor in determining whether the contractor has such a satisfactory record.

2. What documents govern and guide implementation of the FPSW Order?

The President directed the Federal Acquisition Regulatory Council (FAR Council) to issue regulations necessary to carry out the Executive Order and the Department of Labor (DOL) to develop guidance to help implement the new requirements. The FAR Rule and DOL Guidance govern and guide the EO's implementation, specifically:

  • The FAR Rule: The Federal Acquisition Regulation is the principal set of rules governing the federal procurement system. The FAR Council has created FAR Subpart 22.20 to implement the FPSW Order. FAR Subpart 22.20 includes but is not limited to: new disclosures that contractors must make to assist federal contracting officers in making responsibility determinations; processes for working with Agency Labor Compliance Advisors, who will advise contracting officers on evaluating labor law violations, mitigating factors and remedial measures; and new solicitation and clause provisions, including provisions regarding paycheck transparency, subcontractor disclosures, and mandatory arbitration.
  • DOL Guidance: DOL's guidance defines the categories of labor law violations that contractors must disclose (administrative merits determinations, civil judgments, and arbitral awards or decisions); defines the terms that will be used to classify labor violations (serious, repeated, willful, and pervasive); provides guidance on weighing violations and mitigating factors; outlines the process by which contractors can come to DOL independent of specific contract solicitations for Preassessment of their labor violations; and provides guidance on implementing the Order's paycheck transparency provisions.

3. Will FPSW implementation slow down the procurement process?

Nothing in this rule will bring the system to a halt, and many steps have been taken to minimize the time impact associated with its requirements. For businesses that comply with labor laws, the reporting process is very simple. The vast majority of businesses will only need to check a box affirming that they did not have any labor violations during the reporting period. For contractors with violations, the disclosure process builds on the existing procurement system familiar to contractors and contracting officers. For example, disclosures will be made using the same electronic system contractors already use to make other disclosures for which they are already responsible. And both DOL and Agency Labor Compliance Advisors (ALCAs) at agencies across the Administration will be available to help contractors understand their responsibilities under the Order. Overall, the FAR Council and DOL have worked hard to make the system as user-friendly as possible.

4. Are there significant differences between the proposed FPSW rule and the final rule?

Please click here for a chart summarizing significant changes between the proposed rule and the final rule.

Implementation Schedule

5. When does the FPSW Order take effect?

The FAR regulations implementing the FPSW Order will be effective on October 25, 2016. However, several of the requirements will not take immediate effect but will instead be phased in. This will allow both contractors and the government to prepare to implement each component of the Order.

Key Phase-In Dates

  • August 25, 2016: The FAR rule and DOL guidance are issued, but not yet in effect.
  • September 12, 2016: Preassessment begins, through which current or prospective contractors may come to DOL for a voluntary assessment of their labor compliance history, independent of a specific government contract. For more information about the Preassessment process.
  • October 25, 2016: The FAR rule takes effect. Mandatory disclosure of labor compliance history begins for all prime contractors under consideration for contracts with a total contract value greater than or equal to $50 million.
    The general rule under the Order is that contractors and subcontractors must disclose decisions regarding labor violations that were rendered against them within the 3-year period preceding the date of the disclosure. This 3-year disclosure period will be phased in during the first years of implementing the Order, so that no contractor or subcontractor need disclose any decisions regarding labor violations that were rendered against them before October 25, 2015.
    For more information about reporting requirements, refer to the FAR rule and DOL guidance.
  • October 25, 2016: Companies with federal contracts of $1 million or more are prohibited from requiring their workers 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 where valid contracts already exist and remain unmodified.
  • January 1, 2017: The paycheck transparency clause takes effect, requiring contractors to provide wage statements and notice of any independent contractor relationship to their covered workers.
  • April 25, 2017: The total contract value above which prime contractors must make disclosures is reduced to $500,000.
  • October 25, 2017: Mandatory disclosure begins for all subcontractors under consideration for covered subcontracts with a total contract value greater than or equal to $500,000.
  • While the Order also covers equivalent state laws, with the exception of occupational safety and health "State Plans" that have been formally approved by OSHA, equivalent state laws will not be covered in the current guidance and rule; a separate rulemaking will be needed to implement these.
    For more information on the effective data and phase-in requirements, refer to the DOL guidance.

Disclosure of Labor Violations

6. How will contractors disclose their history of labor violations?

When submitting a bid for a government contract in the General Services Administration (GSA) System for Award Management (SAM), prospective contractors will be required to respond to the following:

  • For solicitations issued between October 25, 2016 and April 24, 2017:
    • The Offeror [ ] does [ ] does not anticipate submitting an offer with an estimated contract value of greater than $50 million.
  • For solicitations issued after April 24, 2017:
    • The Offeror [ ] does [ ] does not anticipate submitting an offer with an estimated contract value of greater than $500,000.

If the offeror selects "does," the offeror will respond to the following:

  • [ ] There has been no administrative merits determination, arbitral award or decision, or civil judgment for any labor law violation(s) rendered against the offeror for labor law violations during the period beginning on October 25, 2015 to the date of the offer, or for three years preceding the date of the offer, whichever period is shorter;
    or
  • [ ] There has been an administrative merits determination, arbitral award or decision, or civil judgment for any labor law violation(s) rendered against the offeror for labor law violations for during the period beginning on October 25, 2015 to the date of the offer, or for three years preceding the date of the offer, whichever period is shorter.

If a contracting officer initiates a responsibility determination and the contractor has responded affirmatively, indicating it had labor violations during the reporting period, the contractor will be asked for the following information:

  1. The labor law violated;
  2. The case number, inspection number, charge number, docket number, or other unique identification number;
  3. The date rendered; and
  4. The name of the court, arbitrator(s), agency, board, or commission that rendered the determination or decision.

Finally, successful offerors will be responsible for updating their disclosures twice yearly during performance of the contract.

7. Which violations of workplace protections must be disclosed?

Before they can receive a contract, prospective contractors must disclose violations from the reporting period (the previous three years, once the rule is fully phased in) of 14 basic workplace protections, including those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections.

Specifically, the following federal laws and executive orders are covered:

  • the Fair Labor Standards Act;
  • the Occupational Safety and Health Act;
  • the Migrant and Seasonal Agricultural Workers Protection Act;
  • the National Labor Relations Act;
  • the Davis-Bacon Act;
  • the Service Contract Act;
  • Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity);
  • Section 503 of the Rehabilitation Act of 1973;
  • the Vietnam Era Veterans' Readjustment Assistance Act;
  • the Family and Medical Leave Act;
  • Title VII of the Civil Rights Act of 1964;
  • the Americans with Disabilities Act of 1990;
  • the Age Discrimination in Employment Act of 1967; and
  • Executive Order 13658 of February 12, 2014 (Establishing a Minimum Wage for Contractors).

While the Order also covers equivalent state laws, with the exception of occupational safety and health "State Plans" that have been formally approved by OSHA, equivalent state laws will not be covered in the current guidance and rule; they require a second rulemaking to implement.

8. Will contractor disclosures regarding workplace violations be made public?

The FAR rule will require prospective contractors to publicly disclose whether they have violations of covered laws within the reporting period and, for prospective contractors being evaluated for responsibility, certain basic information about those violations.

Contractors with violations will also have the opportunity to voluntarily provide to the government additional information, such as mitigating circumstances, remedial measures, and other steps taken to achieve compliance with workplace protections. This additional information will only be made public if the contractor chooses to do so.

9. Will contractors with labor violations have an opportunity to present information on their remediation steps?

Yes. The Order requires the contracting officer, as part of the responsibility determination, to provide the prospective contractor with an opportunity to disclose any steps taken to correct violations or improve compliance with labor laws, as well as any other mitigating factors. This information will be taken into account in determining whether the prospective contractor is a responsible source.

In addition, if the contracting officer makes a determination of non-responsibility involving a small business, the prospective contractor must be notified of the decision and be given the opportunity to apply to the SBA for a "certificate of competency." In accordance with long-standing laws and rules for this appeal process, if the SBA certifies the small business to be capable and competent for the specific government contract, then the certificate would override the responsibility decision made by the contracting officer.

10. How can communities participate in this process?

Members of the public will be able to contact ALCAs with information they feel should have been disclosed about contractors' labor violations. Contact information for all ALCAs will be made available on the Department of Labor's website.

Of course, only information regarding administrative merits determinations, civil judgments, or arbitral awards will be considered, as set forth in the DOL guidance. Mere allegations will not be considered.

Scope of Coverage

11. How many contractors will be impacted?

When the rule is fully implemented, every year approximately 14,000 contractors will receive prime contracts covered by the Order.

Only a small share of these companies is expected to have reportable violations, and even fewer are expected to have serious, repeated, willful, or pervasive violations to report. And a significantly smaller share would be expected to be deemed a non-responsible source, once mitigating factors are taken into account, such as remediation steps previously taken and the contractor's size relative to the number and nature of violations. Of those contractors that would be considered non-responsible sources due to their labor compliance history, many are expected to take remedial action sufficient to be found responsible.

The vast majority of contractors will only have to attest that they have no violations of the workplace protection laws identified in the Order during the reporting period.

12. What types of contracts are covered?

When fully implemented, DOL's guidance and the FAR Council's rule will apply to new contracts for goods and services, including construction, where the estimated value exceeds $500,000 over the life of the contract.

The guidance and regulations will also cover new subcontracts for goods and services, other than commercially available off-the-shelf items, where the estimated value of goods and services exceeds $500,000 over the life of the contract.

Compliance Assistance and Burden on Contractors

13. What steps have been taken to reduce the burden of this EO on federal contractors?

The Administration has taken a number of steps to limit the burden on contractors. In particular:

  • The rule's requirements will be phased in over time.
  • The processes set forth in the proposed guidance and proposed regulations build on the existing federal procurement policies and practices with which contractors are familiar.
  • Most federal contractors comply with the workplace protections covered in the Order and will be able to attest that they have no violations in the preceding three years.
  • DOL and Agency Labor Compliance Advisors across the Administration will be available to help contractors and subcontractors understand their responsibilities under the Order and comply with relevant law.
  • Companies will report violations in the same system they are already using to meet other procurement requirements.
  • Companies will have an opportunity to identify and remedy potential problems before bidding on contracts.
  • The final regulations provide that subcontractors will disclose their labor law violations directly to DOL, significantly reducing the burden on prime contractors. Prime contractors will be able to rely on DOL's review of a subcontractor's violations in determining whether the subcontractor is responsible.

14. What assistance is there for small businesses and minority contractors who may have greater difficulty in complying with the Executive Order?

The Order does not impose any new obligations on government contractors to comply with basic workplace protections. The obligation to comply with basic workplace protection laws is long-standing for all employers covered by those laws, including government contractors. The Order only adds the requirement that prospective contractors share information about their compliance history before being awarded a contract.

Small businesses are unlikely to be affected by the Order, which exempts contracts and subcontracts valued at less than $500,000 and subcontracts for commercial-off-the-shelf (COTS) products. Most small businesses fall under these exemptions.

There are resources available to contractors, including small businesses, to help them comply with existing law and the requirements of the Order.

  • DOL, the National Labor Relations Board, and the Equal Employment Opportunity Commission all provide extensive compliance assistance services for employers, including government contractors, to help them comply with existing labor laws. DOL has several compliance assistance programs that specifically help small businesses.
  • DOL, along with Agency Labor Compliance Advisors across contracting agencies, will be available to help contractors understand and comply with their responsibilities under the Order.

Finally, if the contracting officer makes a determination of non-responsibility involving a small business, the prospective contractor must be notified of the decision and be given the opportunity to apply to the Small Business Administration (SBA) for a "certificate of competency." In accordance with long-standing laws and rules for this appeal process, if the SBA certifies the small business to be capable and competent for the specific government contract, then the certificate would override the responsibility decision made by the contracting officer.

Additional Questions Regarding Labor Violations

15. Some of the administrative merits determinations that contractors must disclose are complaints issued by enforcement agencies. Shouldn't a finding be required before contractors must disclose a violation, rather than a mere complaint?

Administrative merits determinations are the products of expert government investigators doing extensive fact finding and exercising informed judgment that a violation of the law has taken place.

The complaints issued by enforcement agencies that are included in the definition of "administrative merits determination" are not akin to complaints filed by private parties to initiate lawsuits in federal or state courts. Each complaint included in the definition represents a finding by an enforcement agency — following a full investigation — that a labor law was violated.

In contrast, a complaint filed by a private party in a federal or state court represents allegations made by that plaintiff and not an enforcement agency; such complaints are not administrative merits determinations. Similarly, employee complaints made to enforcement agencies (such as a complaint for failure to pay overtime wages filed with the DOL's Wage and Hour Division or a charge of discrimination filed with the Equal Employment Opportunity Commission) are not administrative merits determinations.

As noted in the DOL guidance, to the extent a civil judgment, administrative merits determination, or arbitral award or decision is not final, it will be given lesser weight by the contracting officer in making a responsibility determination.

16. Are contracting officers concerned with all types of violations?

No. Consistent with the DOL guidance, contracting officers will only consider those violations that are serious, repeated, willful, or pervasive in determining whether a contractor is responsible.

Serious, repeated, willful, and/or pervasive violations encompass only the most egregious violations, and the vast majority of contractors will have no violations of these types. For those that do, agencies will make every effort to help those contractors come into compliance.

17. Will a contractor lose federal contracts for a single violation?

No. The Order, DOL guidance and FAR regulations specifically state that in most cases a single violation of law may not give rise to a determination of lack of responsibility. In making responsibility determinations, contracting officers are directed to consider a range of factors, including whether violations are serious, repeated, willful, or pervasive; and mitigating factors, including what remedial steps the contractor has taken to fix identified problems, the number of violations relative to the contractor's size, and the existence of robust internal reporting structures.

Further, in most cases where violations require corrective actions, contractors will be given a chance to enter into labor compliance agreements to address any outstanding violations. The goal of this process is to bring contractors into compliance with workplace protection laws, not to penalize them for a single violation.

18. Can a contract be denied or taken away based solely on employee allegations?

No. The Order directs contracting officers, in consultation with Agency Labor Compliance Advisors and DOL, to consider administrative merits determinations, arbitration decisions and awards, and civil judgments in making determinations of a contractor's integrity and business ethics.

19. Will contractors have to address all existing violations before getting a contract?

No. The focus is not on all violations — it is on those that are serious, repeated, willful, or pervasive. In some cases, compliance issues may not need to be addressed for the contractor to be determined to be responsible. However, as a general rule, remediation will help.

20. What responsibilities do prime contractors have with regard to subcontractors' violations?

Contractors are required to direct their prospective subcontractors to submit labor violation information to DOL. Prospective subcontractors will also be afforded an opportunity to provide information to DOL on mitigating factors and remedial measures, such as subcontractor actions taken to address the violations, labor compliance agreements, and other steps taken to achieve compliance with labor laws. Contractors will consider DOL's analysis and advice as they make responsibility determinations regarding their prospective subcontractors for subcontracts covered by the rule at any tier (those with subcontracts estimated to exceed $500,000, except for subcontracts for commercially available off-the-shelf items).

Relationship to Suspension and Debarment

21. How is this different from the existing Suspension and Debarment procedures?

Suspension and debarment procedures play an important role in the procurement process. They serve to exclude from the federal contracting process those contractors whose record is so poor that it serves the public interest to preclude them completely from receiving additional contracts.

The processes and tools DOL and the FAR Council are establishing are designed to help in identifying and addressing labor violations before they require consideration of suspension and debarment.

Contracting officers will not be compelled to deny any prospective contractor the award of a contract because of a labor law violation. Instead, contracting officers will make responsibility determinations based on, among other things, the prospective contractor's record of integrity and business ethics — as informed by any labor law violations and mitigating factors, including the extent to which a contractor has taken steps to negotiate compliance agreements with enforcement agencies to correct past problems and avoid future ones.

In some cases, contractors may need to be considered for suspension and debarment because of the seriousness of their violations and the failure to take remedial actions. The Order does not, in any way, alter the suspension or debarment process, or long-standing principles of fairness and due process built into those procedures. However, the expectation is that the processes and tools envisioned by the Order will reduce the need for an agency to consider suspension and debarment and help contractors avoid the consequences of those remedies.

Having trouble finding the answer to your question on our website? Contact us at FPSW@dol.gov.