HR Management & Compliance

Executive Order creates new compliance requirements for federal contractors

On July 31, President Barack Obama signed an Executive Order “to promote economy and efficiency in procurement by contracting with responsible sources who comply with labor laws.” The order will apply to new government contracts worth more than $500,000, and according to a White House fact sheet, it will be “implemented on new contracts in stages, on a prioritized basis, beginning in 2016.”

The Executive Order requires contractors to report if they have violated any of 14 labor laws in the past three years. Employers also must provide updates regarding violations every six months and possibly face remedial action.

Among the laws mentioned in the order are the Fair Labor Standards Act (FLSA), the Occupational Safety and Health Act (OSH Act), the Migrant and Seasonal Agricultural Worker Protection Act, the Family and Medical Leave Act (FMLA), the Davis-Bacon Act, the National Labor Relations Act (NLRA), Section 503 of the Rehabilitation Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and several other Executive Orders, including Executive Order 13658, which established a new minimum wage for federal contractors.

In addition, employers with contracts of $1 million or more must include a clause stating that they will not require employees or independent contractors to enter into predispute arbitration agreements for disputes arising out of Title VII or torts (wrongful acts) related to sexual assault or harassment.

According to Jason Miller of Federal News Radio, before signing the Executive Order, President Obama said the goal is to make the contracting process “smarter.” The president said:

Many of the people who award contracts don’t always have the information that they need to make sure contracts go to responsible companies. The vast majority of the companies that contract with our government, they play by the rules. They live up to the right workplace standards. But some don’t. And I don’t want those who don’t to be getting a contract and getting a competitive advantage over the folks who are doing the right thing.

According to the White House fact sheet, federal contractors and other interested parties will be invited to participate in “listening sessions” with the Office of Management and Budget, the U.S. Department of Labor (DOL), and senior White House officials to share views on implementing policies. Their input will be taken into consideration when regulations and guidance are drafted, and regulations will be published for public comment before being finalized.