Executive Order – Fair Pay and Safe Workplaces

On July 31, 2014, the White House issued an Executive Order entitled “Fair Pay and Safe Workplaces.  The purpose of this order is to “promote economy and efficiency in procurement by contracting with responsible sources who comply with labor laws.”  This order was effective immediately upon issuance but is expected to be implemented in phases over the next two and a half years.

This Order applies to Federal Government contracts for goods or services in excess of $500,000.  Under this Order, private businesses that desire to enter into contracts with the Federal Government for the provision of goods or services must report any violations of specific labor laws by the contractor and all subcontractors during the three (3) year period preceding the prospective contract.  In addition, this information must be updated every six (6) months for the duration of the contract.  These specific labor laws include the following:

  1. The Fair Labors Standards Act
  2. The Occupational Safety and Health Act of 1970
  3. The Migrant and Seasonal Agricultural Worker Protection Act
  4. The National Labor Relations Act
  5. The Davis-Bacon Act (40 U.S.C., Chapter 31, subchapter IV)
  6. The Service Contract Act (41 U.S.C., Chapter 67)
  7. Equal Employment Opportunity (Executive Order 11246, September 24, 1965)
  8. Section 503 of the Rehabilitation Act of 1973
  9. The Vietnam Era Veterans’ Readjustment Assistance Act of 1974
  10. The Family and Medical Leave Act
  11. Title VII of the Civil Rights Act of 1964
  12. The Americans with Disabilities Act of 1990
  13. The Age Discrimination in Employment Act of 1967
  14. Establishing a Minimum Wage for Contractors (Executive Order 13658, February 12, 2014)
  15. Equivalent State laws, as defined in guidance issued by the U.S. Department of Labor.

A single violation of applicable labor laws will not necessarily bar a contractor or subcontractor from performing services for the Federal Government under a direct contract or a subcontract with a Federal agency.  Each agency will work with contractors and subcontractors to assess violations and resolve the problems to avoid future violations.

In the case of serious or repeated violations by a contractor or subcontractor, the agency may choose not to exercise an option on a specific contract, may terminate a contract, or may suspend or debar a contractor or subcontractor from future Federal contracts.  The most extreme actions will only be applied to contractors or subcontractors who commit serious, repeated, willful or pervasive violations that demonstrate a lack of integrity or business ethics.

In addition, contractors and subcontractors must provide employees (as defined under the Fair Labor Standards Act or the Davis Bacon Act) performing work under the contract with a statement of the hours worked, overtime hours, pay and any additions to or deductions from the employee’s pay.  If an individual performing services under a contract or a subcontract is treated as an independent contractor and not as an employee, the contractor or subcontractor must provide the individual with a document informing the individual of this status.

Further, in contacts for goods or services in excess of $1,000,000, contractors and subcontractors must agree to arbitrate disputes arising under Title VII of the Civil Rights Act of 1964 or any tort arising from or related to sexual assault or harassment, only with the post-offense voluntary consent of the employee(s) or independent contractor(s).

The General Services Administration (GSA) will develop a single website that all Federal contractors will use to meet the reporting requirements under this order.  Additional regulations to amend the Federal Acquisition Regulations (FAR) and other guidance issued by the Department of Labor will be forthcoming.