On Thursday, the White House and Department of Labor issued the final regulations and guidance implementing the Fair Pay and Safe Workplaces executive order. The regulations will go into effect on October 25, with provisions phased in over the next two years.
As the Project On Government Oversight has been reporting since President Obama signed the executive order two years ago, the regulations will increase transparency and help improve federal contractors’ labor practices. The White House estimates there are roughly 24,000 companies doing business with the federal government, employing about 28 million Americans. Some of these companies have poor labor compliance records—so-called “low road” contractors that shortchange the government and taxpayers and endanger workers' lives.
Prospective contractors and subcontractors will now be required to disclose violations in the last three years of federal and state laws pertaining to wages, workplace health and safety, collective bargaining, family and medical leave, and civil rights. Agencies will evaluate this information as part of the mandatory pre-award screening called a responsibility determination. Information about violations will be posted on the Federal Awardee Performance and Integrity Information System (FAPIIS) database.
In addition, contractors will be prohibited from forcing employees to submit to arbitration in discrimination and sexual assault and harassment cases. Contractors must also provide their employees with the information they need each pay period to verify the accuracy of their paychecks.
Business groups are unhappy with the final regulations. They call them the “blacklisting" rules, fearing they will lose government business over bogus labor violation allegations. As we’ve pointed out before, however, those fears are misplaced. The focus of the regulations is helping contractors resolve labor compliance issues. Contracts will only be denied to a select few companies found to have serious, repeated, willful, or pervasive violations. Nevertheless, industry-backed Members of Congress are trying to nullify or severely weaken the regulations by cutting off funding and carving out an exemption for the Department of Defense, by far the government’s largest contracting agency.
While we are pleased with the final regulations, we are still concerned that certain disclosure limitations will diminish their effectiveness. For example, as we pointed out last year in a public comment to the government, contractors are not required to report criminal violations, settled cases, or violations of foreign labor laws.
We are also encouraged to see the FAPIIS database being put to a new use. We were early backers of this database, which was modeled on our own Federal Contractor Misconduct Database. At first, we were disappointed with FAPIIS’ relatively limited scope of data, but true to the government’s promise, the amount of contractor and grantee data entered into the system keeps growing.