President Issues “Fair Pay and Safe Workplaces” Executive Order
On July 31, 2014, the President issued the “Fair Pay and Safe Workplaces” Executive Order (“EO”) “to promote economy and efficiency in procurement by contracting with responsible sources who comply with labor laws.” According to the White House Fact Sheet, the EO is intended to “crack[ ] down on federal contractors who put workers’ safety and hard-earned pay at risk.”
The EO imposes significant new obligations on contractors with contracts worth more than $500,000. These obligations include, but are not limited to:
- Requiring federal contractors to disclose during the bid process any “labor law” violations committed within the last three years. A “labor law” includes laws such as the FLSA, OSHA, NLRA, Davis-Bacon Act, Service Contract Act, FMLA, relevant affirmative action laws, Title VII, the ADA, ADEA, and equivalent state laws;
- Prohibiting federal contractors seeking contracts in excess of $1 million from requiring employees to enter into mandatory arbitration agreements to resolve sexual discrimination, harassment, or assault disputes;
- Requiring contractors to provide their employees, in each pay period, with information related to their wages, hours worked, overtime, and any additions/deductions made to pay;
- Requiring contractors to provide written notification to individuals performing work under the contract or subcontract as independent contractors, informing them that they are considered independent contractors, and not an employees;
- Certifying that any subcontractors whose compensation exceeds $500,000 meets these same obligations.
We will provide more detail related to these new obligations when proposed regulations are released. Unfortunately, we have not been given an estimated timeframe for such regulations—the EO states only that final regulations shall be issued “in a timely fashion after considering all public comments.” In the meantime, employers with larger federal contracts should be aware that these new obligations are coming, and begin thinking about compliance.