On October 25th, the Fair Pay and Safe Workplaces Executive Order comes into effect meaning any contractor with recorded labor law violations will be ineligible to bid on American federal government contracts.
As expected, the comment period was filled with positive and negative reactions. Ultimately, the order’s primary goal isn’t to deny work to contractors, it’s to help ensure existing labor laws are followed and reduce project delays
- Past violations can disqualify contractors from winning government contracts.
- Almost half of OSHA violations were against companies holding government contracts.
- 42 American worker fatalities directly related to OSHA violations.
- The aim is for course correction, not penalization.
- Find out how your company ranks.
Workplace Safety Must Really Come First:
Once the executive order is active, past labor law violations can disqualify a contractor from winning a new government contract. Companies must disclose any violations from the previous three years and subcontractors must report every 6 months. This should give any company with its sights on a government contract ample motivation to comply with labor laws.
The official White House press release states that the contracting officer shall determine “whether a subcontractor is a responsible source that has a satisfactory record of integrity and business ethics.” If the company is later found to be in violation, the officer can take action up to and including contract termination and even referral to a debarring official.
The Order Could Affect Numerous Contractors:
The Washington Post reports that the GOP, federal contractor attorneys and certain companies loudly objected to the order, stating that it could “shut out” and blacklist government contractors. However, the Obama administration asserts that misconduct has been chronic, widespread and disproportionately high for government contractors.
In a 2013 report by the U.S. Senate, “Almost half of the total initial penalty dollars assessed for OSHA violations were against companies holding government contracts.” Moreover, the top 30 percent of federal wage and safety law violators were — at the time of the report — current federal contractors. Complaints include failing to pay workers and failing to provide safe and healthy work conditions.
The Numbers Reveal a Need for Intervention:
Workplace safety can’t only be written as policy, it must be an actionable process. However, for many workers that is the reality of working for a government contractor. If that seems slanted or unfair, consider what the Senate report has to say:
- The 100 heftiest OSHA penalties between 2007 and 2012 were issued to federal contractors.
- There were 42 American worker deaths during that period, and those fatalities were directly related to their respective companies’ OSHA violations.
- The 100 largest back wage assessments by the U.S. Department of Labor Wage and Hour Division during that period were issued to 32 federal contractors.
- Of the companies with penalties, 35 violated both safety and wage laws.
- A total of 1,776 violations and $196 million in penalties and assessments were issued to 49 federal contractors. Those same contractors had been awarded over $80 billion in taxpayer dollars for federal contracts.
Those who oppose the executive order believe that it will harm otherwise responsible contractors. But those who support the order assert that the voluminous violations by non-compliant contractors have already harmed workers for many years.
The Obama administration hopes that the executive order will function not as a penalty but a course correction. Once implemented, contractors will have a clear reason to comply with existing federal labor laws, and their employees will have a better opportunity to work in a healthy and fair environment.
(Workplace safety is already the top priority for many responsible contractors, want to see how your workplace stacks up? Click below)