WASHINGTON — While the vast majority of federal contractors play by the rules, every year tens of thousands of American workers are denied overtime wages, are unlawfully discriminated against in hiring or pay, have their health and safety put at risk by those contractors that cut corners or are otherwise unlawfully denied basic workplace protections.
To improve contractor compliance with basic workplace protections, on July 31, 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order, which will require prospective federal contractors to disclose labor law violations and will give agencies more guidance on how to consider labor violations when awarding federal contracts.
Today, the Department of Labor is issuing proposed guidance to assist contracting agencies and the contracting community in applying the order's requirements, including evaluating the severity of labor violations. The Federal Acquisition Regulatory Council (FAR Council) is also issuing proposed regulations integrating the order's requirements, and the provisions of the Labor Department's guidance into the existing procurement rules. Both the FAR Council's proposed regulations and the Labor Department's proposed guidance will be published in the Federal Register, followed by a 60-day public comment period.
The proposed guidance and regulations build on the existing procurement system, and most federal contractors will only have to attest that they comply with laws providing basic workplace protections; for those contractors that report violations, designated Labor Compliance Advisors will coordinate with the relevant enforcement agency experts to help them come into compliance.
"The opportunity to contract with the federal government is a privilege, not an entitlement. Taxpayer dollars should not reward corporations that break the law, and contractors who meet their responsibilities should not have to compete against those who do not," said U.S. Secretary of Labor Thomas E. Perez. "The guidance issued today to implement the Fair Pay and Safe Workplace Executive Order will promote better informed procurement decisions. It will provide contracting officers with the necessary information to ensure accurate, efficient, and consistent compliance with labor laws, and provide a means to help contractors meet their responsibilities. We welcome public feedback in order to make this process as effective as possible."
In addition to setting up a process to effectively consider labor law violations, the Executive Order ensures that contractors' employees are given the necessary information each pay period to verify the accuracy of their paycheck. It also ensures that workers who may have been sexually assaulted or had their civil rights violated get their day in court, putting an end to mandatory pre-dispute arbitration agreements covering these claims at large federal contractors.
The FAR Council and the Labor Department have made every effort to streamline the disclosure process and minimize the burden on contractors. Both the proposed guidance and regulations were informed by extensive outreach to stakeholders, including contractors, contractor organizations, and worker advocates. "The listening sessions were invaluable as we developed today's proposed guidance and FAR rule," said Administrator of the Office of Federal Procurement Policy Anne Rung. "We've proposed a number of steps to ensure that the rules and guidance are fair, clear and manageable." In addition to building on the existing federal acquisition system with which contractors are already familiar, parts of the regulations and guidance will be phased in so that contractors have additional time to better understand the requirements.