This week marks the second anniversary of President Obama signing his Fair Pay and Safe Workplaces executive order, which aims to ensure that the federal government does business only with responsible companies that respect our nation’s labor and workplace safety laws.
This sensible policy is good for law-abiding businesses, good for workers, and good for taxpayers. On the eve of its implementation, however, powerful special interests are trying to torpedo this important initiative with a misinformation campaign that’s fueling obstruction by Congressional Republicans.
Every year, the federal government awards hundreds of billions of dollars in contracts for goods and services. The executive order will help ensure that contracts are awarded to responsible employers that comply with workplace safety laws, anti-discrimination laws (including those that protect disabled veterans), sexual harassment laws, and minimum wage and overtime laws. It underscores the fundamental principle that companies that play by the rules shouldn’t be undercut by those that don’t.
The order “levels the playing field” by requiring bidders simply to disclose any violations of worker protection laws. That’s all. Potential contractors just have to disclose any violations. They’re not disqualified if they have violations nor put on any kind of blacklist. Quite the opposite: the order provides a path for companies with outstanding violations to come into compliance. It applies only to large federal contracts—those above $500,000.
The idea isn’t new; the order only affirms existing law, which requires the government to award contracts only to responsible companies that have a satisfactory record of integrity and business ethics. The problem is that in the past, violations affecting workers weren’t considered when making this determination.
Incredibly, under our broken federal procurement system, the government regularly awards contracts to companies with serious violations of worker protection laws. These include a lack of safety protections in poultry processing plants or chemical plants resulting in amputations and worker fatalities; wage theft where companies fail to pay legally required minimum wage rates or overtime; and sexual harassment and employment discrimination.
Even companies with the most egregious violations continue to receive federal contracts. One such company, where four workers were killed in a horrific incident, was recently blasted by officials at the Occupational Safety and Health Administration, who said the workers “would be alive today had their employer taken steps to protect them.”
According to a 2013 U.S. Senate report, almost 30 percent of companies charged with the highest penalties for federal labor law violations are also federal contractors.
Further, a review by the Center for American Progress Action Fund of companies with the worst workplace violations between 2005 and 2009 found that one in four had significant performance problems. It’s really no surprise that companies who broke worker protection laws also had other problems, such as fraudulent billing, cost overruns, and performance issues.
Consumers would steer clear of businesses with such shady records; the stewards of our tax dollars should do the same. Why should taxpayer dollars reward corporations that cut corners and jeopardize the health and safety of workers, illegally shortchange workers on wages, and discriminate against them on the job.
The government will soon issue final regulations implementing the executive order, which are expected to emphasize remediation and corrective action to encourage and enable bidders with serious, willful, repeated, and pervasive labor law violations to come into compliance and be deemed responsible.
But industry associations representing major contractors—many of whom have a history of employment law violations themselves—are opposing these new rules. They persuaded Republican leaders in Congress to amend the National Defense Authorization Act to exempt the Department of Defense, which accounts for almost two-thirds of all federal contracting, from the executive order’s coverage.
Congress has yet to act on this bill, so there’s still time to remove that loophole that gives a free pass to companies to practice workplace discrimination, deprive workers of overtime pay, and expose them to safety risks.
It’s important that the NDAA, which is vital to preserving national security, pass without this gift to law-breaking companies. Taxpayer dollars should not support contractors that violate worker’s rights but should instead reward companies that respect all our laws.