On July 31, President Obama issued yet another Executive Order to crack down on “federal contractors who put workers’ safety and hard-earned pay at risk.” The new Executive Order, called Fair Pay and Safe Workplaces, will require federal contractors to report certain labor law violations from the previous three years when submitting a bid on projects. It also prevents the use of arbitration agreements to resolve employment discrimination claims. These are significant changes that will impact the way contractors do business with the government.
Which Contracts Are Covered?
The new reporting requirements will apply to any procurement contract or subcontract in excess of $500,000. The “no-arbitration” requirements will apply to contractor and subcontracts in excess of $1,000,000.
What Are the Reporting Requirements?
When submitting a bid, contractors will be required to report labor law violations resulting from administrative merits determinations, arbitral awards and civil judgments based on employment and labor laws. Contractors will also have to report twice a year during the pendency of the contract. A few of the employment and labor laws are:
- Fair Labor Standards Act
- National Labor Relations Act
- Davis-Bacon Act
- Title VII
- Americans with Disabilities Act
- Age Discrimination in Employment Act
What Happens to Existing Arbitration Agreements?
Contractors submitting bids must agree that claims arising under Title VII or any tort related to sexual assault or harassment will not arbitrated unless the employee agrees after the complaint is lodged. The arbitration prohibition does not apply to existing arbitration agreements unless the employer has retained the discretion to unilaterally modify the agreements. The anti-arbitration requirement does not apply to collective bargaining agreements.
When Does the Executive Order Take Effect?
The Executive Order will not go into effect until after the Federal Acquisition Regulatory (FAR) Council issues implementing regulations, which are not expected until 2016.