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Obama Signs Executive Order Requiring Federal Contractors to Disclose Labor Law Violations and Prohibiting Certain Arbitration Agreements
Practical Law Legal Update 7-576-9025 (Approx. 5 pages)
Obama Signs Executive Order Requiring Federal Contractors to Disclose Labor Law Violations and Prohibiting Certain Arbitration Agreements
by Practical Law Labor & Employment
| Published on 05 Aug 2014 • USA (National/Federal) |
President Obama has signed the Fair Pay and Safe Workplaces Executive Order requiring prospective federal contractors to disclose labor law violations and giving agencies more guidance on how to consider labor violations when awarding federal contracts. The Executive Order also ensures that workers are given the necessary information each pay period to verify the accuracy of their paychecks and eliminates most mandatory arbitration agreements for certain claims at corporations with large federal contracts. The White House has also released a fact sheet providing information about the Executive Order.
On July 31, 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order requiring prospective federal contractors to disclose labor law violations and giving agencies more guidance on how to consider labor violations when awarding federal contracts. The Executive Order also ensures that workers are given the necessary information each pay period to verify the accuracy of their paychecks and eliminates most mandatory arbitration agreements for certain claims at corporations with large federal contracts. The White House Press Secretary has also released a fact sheet providing information about the Executive Order.
Under the Executive Order:
- Prospective contractors and subcontractors on procurement contracts for goods and services, including construction, valued at more than $500,000 must disclose labor law violations from the past three years. Companies awarded affected contracts and subcontracts must update the information on labor law violations every six months. The laws include:
- the Fair Labor Standards Act (FLSA);
- the Occupational Safety and Health Act (OSH Act);
- the Migrant and Seasonal Agricultural Worker Protection Act (MSPA);
- the National Labor Relations Act (NLRA);
- the Davis-Bacon Act (40 U.S.C. chapter 31, subchapter IV);
- the Service Contract Act (41 U.S.C. chapter 67);
- Executive Order 11246 of 1965 (providing for equal employment opportunity);
- section 503 of the Rehabilitation Act of 1973;
- the Family and Medical Leave Act (FMLA);
- Title VII of the Civil Rights Act of 1964 (Title VII);
- the Americans with Disabilities Act of 1990 (ADA);
- the Age Discrimination in Employment Act of 1967 (ADEA);
- Executive Order 13658 of February 12, 2014 (minimum wage); and
- equivalent state laws, as defined by Department of Labor (DOL) guidance.
- Each federal agency must designate a senior official as a Labor Compliance Advisor to provide consistent guidance and promote greater understanding of labor law requirements, including recordkeeping, reporting and notice requirements and best practices for compliance. This advisor will support individual contracting officers in reviewing disclosures and consult with the DOL to ensure that repeat violators are unable to secure contracts.
- Companies with labor law violations will be offered the opportunity to receive early guidance on whether those violations are potentially problematic and to remedy any problems. Contracting officers will take these steps into account before awarding a contract and will ensure the contractor is living up to the terms of its agreement.
- Companies with federal contracts of $1 million or more are prohibited from requiring their employees to enter into predispute arbitration agreements for disputes arising out of Title VII or from torts related to sexual assault or harassment. Arbitration agreements for these claims are enforceable if:
- the employee voluntarily agrees to arbitrate the claims after the dispute arises;
- the employee is covered by a collective bargaining agreement; or
- the employee or independent contractor entered into the arbitration agreement before the employer bid on the federal contract covered by this order, unless the agreement is subject to renegotiation, replacement or can be changed by the employer after the federal contract is awarded.
- Contractors must give all employees a pay stub with basic information concerning their:
- hours worked;
- overtime hours;
- pay; and
- any additions to or deductions made from their pay.
- To streamline implementation and overall contractor reporting, the General Services Administration is directed to develop a single website for contractors to meet reporting requirements.
The Executive Order directs the Federal Acquisition Regulation (FAR) to propose rules, regulations and orders as deemed necessary and appropriate to implement the Executive Order and issue the final regulations on time after considering all public comments.
The Executive Order becomes effective immediately and is expected to be implemented during 2016. Implementation will take place on new contracts in stages, on a prioritized basis.