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This year, we have reported on President Obama’s Executive Orders raising the minimum wage for federal contractors, prohibiting retaliation against workers who share their salary information, and prohibiting LGBT (lesbian, gay, bisexual and transgender) discrimination against federal employees and those who work for federal contractors.  President Obama recently signed another Executive Order, this time requiring companies bidding on federal contracts to disclose certain labor law violations.

Under the new Fair Pay and Safe Workplaces Executive Order, federal agencies must require companies bidding on procurement contracts for goods and services over $500,000 to disclose “whether there has been any administrative merits determination, arbitral award or decision, or civil judgment” against the bidding company within the preceding three years for violations of certain labor laws and executive orders.  These include the Fair Labor Standards Act (“FLSA”), the Occupational Safety and Health Act (“OSHA”), Migrant and Seasonal Agricultural Worker Protection Act, National Labor Relations Act, Title VII of the Civil Rights Act of 1964, Family Medical and Leave Act (“FMLA”), Americans with Disabilities Act (“ADA”), Age Discrimination in Employment Act (“ADEA”), the above-mentioned executive orders relating to equal employment opportunity and the minimum wage for federal contractors, and even “equivalent State laws, as defined in guidance by the Department of Labor.”  Bidding companies with violations may indicate steps taken to correct the violations and agreements made with enforcement agencies.  They must also gather and consider the same information from subcontractors before awarding a subcontract and throughout the performance of an awarded contract.

Agency contracting officers must consider the bidding companies’ labor violations as part of the award process and determine whether the company “is a responsible source that has a satisfactory record of integrity and business ethics,” consistent with Department of Labor guidelines and Federal Acquisition Regulatory Council final rules.  Depending on what determination is made, contracting officers may be required to refer a company to the agency’s suspending and debarring official.  This official has the authority to exclude companies from submitting bids for or receiving federal contracts and subcontracts.  Winning bidders are also under a continuing obligation to update their reporting after a contract is awarded.  Depending on the updated information, the contracting officer may consult with the agency’s Labor Compliance Advisor (who is to be a senior agency official specially designated as such pursuant to Section 3 of the Executive Order) and take a variety of actions, including requiring the company to take remedial measures, providing compliance assistance, resolving issues to avoid further violations, declining to exercise an option on the contract, terminating the contract, or referring the company to the suspending and debarring official.

This Executive Order is another example of President Obama’s attempts to take action directly, thereby avoiding the increasingly-lengthy legislative process.  Amending labor laws directly to make their requirements more stringent or increase penalties would require significant political maneuvering in Congress which President Obama wants to avoid.

Brody and Associates regularly advises management on complying with the latest state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.