Vendors must disclose labor law violations

President Obama approved a new executive order that expands the government’s scrutiny of contractor labor law violations.

The order requires companies to disclose any such violations for the previous three years before they can get a federal contract.

It applies to federal contracts valued at $500,000 or more, and will take effect in phases in 2016.

The goal of the order is to make it easier for federal agencies to determine whether vendors are complying with federal and state laws addressing wages and hours, safety and health, collective bargaining, family and medical leave and civil rights protections, according to a White House Fact Sheet.

Nearly 30% of the top violators of federal wage and safety laws are current federal contractors, according to a 2013 report from the Senate Health, Education, Labor and Pensions Committee.

“Our tax dollars shouldn’t go to companies that violate workplace laws,” Obama said.

The White House said it would issue guidance to agencies on how to evaluate whether specific violations should bar a firm from receiving a federal contract.

“Contracting officers will take into account only the most egregious violations, and each agency will designate a senior official as a Labor Compliance Advisor to provide consistent guidance on whether contractors’ actions rise to the level of a lack of integrity or business ethics,” the White House Fact Sheet states.

The government estimates that the “overwhelming majority” of the 24,000 existing federal contractors have no federal labor law violations in the past three years and would not be affected by the order.

But some specialists say the order will have great impact.

“We are concerned these sweeping changes threaten the due process rights of federal contractors and conflict with existing federal procurement and labor law,” Geoff Burr, vice president of Associated Builders and Contractors, told The Hill newspaper.

“The executive order imposes multiple new obligations on government contractors and greatly increases the risks that such contractors will confront,” according to Littler Mendelson law firm.

Obama recently also raised the minimum wage for contractors and barred them from discrimination.

More Information: White House Fact Sheet: http://goo.gl/6bpfih
Senate committee report: http://goo.gl/PhbEKD

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