The Fair Pay and Safe Workplace Executive Order (E.O. 13673) targets companies doing business with the Federal Government to “increase efficiency and cost savings”, according to President Obama. But how does it affect primary Federal Contractors and their subcontractors?
Who Is Affected by the Fair Pay and Safe Workplace Executive Order?
The Fair Pay and Safe Workplaces Executive Order affects all Federal Contractors with contracts valued at more than $500,000. The Department of Labor estimates that there are roughly 24,000 businesses with federal contracts, employing about 28 million workers.
What Does the Fair Pay and Safe Workplace Executive Order Change for Federal Contractors?
- Labor Law Violation Tracking and Reporting
Federal Contractors must track all of their labor law violations and reveal the past three years of violations in Federal contract proposals (Section 2). These include violations of:
- Fair Labor Standards Act
- Occupational Safety and Health Act
- Migrant and Seasonal Agricultural Worker Protection Act
- National Labor Relations Act
- Davis-Bacon Act
- Service Contract Act
- Equal Employment Opportunity
- Section 503 of the Rehabilitation Act of 1973
- Vietnam Era Veterans’ Readjustment Assistance Act
- Family and Medical Leave Act
- Title VII of the Civil Rights Act
- Americans with Disabilities Act
- Age Discrimination in Employment Act of 1967
- Executive Order 13658 Establishing a Minimum Wage for Contractors
- Equivalent State laws
Section 2 also applies to subcontractors whose portion of the contract exceeds the $500,000 threshold. Additionally, primary contract holders must report updated information on any new violations every six months for the primary contracting company and for all subcontractors whose portion of the contract exceeds the $500,000 threshold.
The General Service Administration (GSA) will develop a web site that Federal Contractors will use to report labor law violations that will be visible across Federal agencies (Section 4d).
- Paycheck Transparency
Each pay period, Federal Contractors must provide employees performing work under the contract with notice of the employee’s hours worked, overtime hours, pay, and any additions or deductions made in pay (Section 5). This requirement also applies to subcontractors whose portion of the contract exceeds the $500,000 threshold.
- Arbitration Clauses
Federal Contractors with contracts requiring services and supplies with an estimated value greater than $1 million must have the voluntary consent of employees and independent contractors before requiring arbitration for claims arising under title VII of the Civil Rights Act of 1964 or for sexual assault or harassment claims (Section 6).
When Does the Fair Pay and Safe Workplace Executive Order Take Effect?
Although Executive Order is effective immediately, the affected agencies need to determine how to implement the specifics (like the GSA website, for example)(Section 10). The Administration anticipates the Executive Order to be implemented in stages beginning in 2016.
Why Did Obama Sign the Fair Pay and Safe Workplace Executive Order?
Although the Executive Order’s introduction claims to be in the best interest of the employees of Federal Contractors, Section One reveals that it is meant to reduce project delays and avoid complications for the contracting Federal agencies. Additionally, repeat violators of labor laws have continued to receive Federal contracts. Weeding out questionable contractors will, the theory goes, narrow the field of potential vendors and help the contracting agency move through the procurement process and project execution more swiftly.
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