White House Seeks Comment for an Executive Order: “Fair Pay and Safe Workplaces”

The Administration will be publishing this proposed Executive Order (guidance) in tomorrow's Federal Register. The EO seeks to increase safety accountability for those companies that have contracts with federal agencies. This will likely stir up a lot of controversy as it plays out. Something to watch.

SUMMARY:

The Department of Labor is proposing guidance to assist federal agencies in the implementation of Executive Order 13673, Fair Pay and Safe Workplaces (the Order). The Order was signed by President Barack Obama on July 31, 2014, and it contains several new requirements designed to improve the federal contracting process.

The Order seeks to increase efficiency and cost savings in the work performed by parties that contract with the Federal Government by ensuring that the parties are responsible and comply with labor laws. The Order requires federal contractors to report whether there has been any administrative merits determination, civil judgment, or arbitral award or decision rendered against them during the preceding three-year period for violations of any of 14 identified federal labor laws and executive orders or equivalent State laws.1 Contracting officers and Labor Compliance Advisors will assess these types of reported violations (considering whether the violations are serious, repeated, willful, or pervasive) as part of the determination of whether a contractor has a satisfactory record of integrity and business ethics.

Labor Compliance Advisors will be available to consult with contractors that report these types of violations and will coordinate assistance with the relevant enforcement agencies. Contractors will require their subcontractors to report these types of violations of the identified labor laws and will similarly assess reported violations.2 And to achieve further paycheck transparency for workers, contractors and subcontractors will be required to provide their workers on federal contracts with information each pay period regarding how their pay is calculated (a wage statement) and provide notice to those workers whom they treat as independent contractors.

The Order directs the Department of Labor to develop guidance to assist federal agencies in implementing the Order’s requirements. Consistent with that direction, this proposed guidance, when final, will: define “administrative merits determination,” “civil judgment,” and “arbitral award or decision,” and provide guidance on what information related to these determinations must be reported by contractors and subcontractors; define “serious,” “repeated,” “willful,” and “pervasive” violations and provide guidance to contracting officers (or contractors with respect to their subcontractors) and Labor Compliance Advisors for assessing reported violations, including mitigating factors to consider; and provide guidance on the Order’s paycheck transparency provisions, including identifying those States whose wage statement laws are substantially similar to the Order’s wage statement requirement such that providing a worker with a wage statement that complies with any of those State laws satisfies the Order’s requirement.

The Order builds on the existing procurement system, and changes required by the Order fit into established contracting practices that are familiar to both procurement officials and the contracting community. In addition, the Department of Labor will provide support directly to contractors and subcontractors so that they understand their obligations under the Order and can come into compliance with federal labor laws without holding up their contract bids.

Finally, the Department will work with Labor Compliance Advisors across agencies to minimize the amount of information that contractors have to provide and to help ensure efficient, accurate, and consistent decisions across the government. The objective of the Order is to help contractors come into compliance with federal labor laws, not to deny them contracts.

To this end, this proposed guidance, when final, will provide a roadmap to contracting officers, Labor Compliance Advisors, and the contracting community for assessing contractors’ history of labor law compliance with regard to their business integrity and ethics and considering mitigating factors, most notably efforts to remediate any reported labor law violations, including agreements entered into by contractors with enforcement agencies.

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